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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
AthenaHealth Inc has a M-score of -3.13 suggests that the company is not a manipulator.
During the past 12 years, the highest Beneish M-Score of AthenaHealth Inc was -0.87. The lowest was -3.19. And the median was -2.55.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of AthenaHealth Inc for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 0.7686||+||0.528 * 1.0036||+||0.404 * 0.8774||+||0.892 * 1.3602||+||0.115 * 0.6711|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9579||+||4.679 * -0.1539||-||0.327 * 0.8737|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $97.6 Mil.|
Revenue was 185.922 + 163.035 + 171.579 + 151.527 = $672.1 Mil.
Gross Profit was 111.148 + 90.887 + 108.727 + 88.282 = $399.0 Mil.
Total Current Assets was $227.1 Mil.
Total Assets was $865.7 Mil.
Property, Plant and Equipment(Net PPE) was $235.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $80.9 Mil.
Selling, General & Admin. Expense(SGA) was $273.3 Mil.
Total Current Liabilities was $180.8 Mil.
Long-Term Debt was $166.3 Mil.
Net Income was -2.162 + -8.055 + 13.145 + 1.17 = $4.1 Mil.
Non Operating Income was -0.006 + -0.171 + 0.136 + 0.03 = $-0.0 Mil.
Cash Flow from Operations was 49.686 + 14.066 + 37.105 + 36.448 = $137.3 Mil.
|Accounts Receivable was $93.3 Mil.
Revenue was 146.301 + 125.596 + 116.304 + 105.886 = $494.1 Mil.
Gross Profit was 86.911 + 72.411 + 71.096 + 64.02 = $294.4 Mil.
Total Current Assets was $151.2 Mil.
Total Assets was $759.4 Mil.
Property, Plant and Equipment(Net PPE) was $204.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.5 Mil.
Selling, General & Admin. Expense(SGA) was $209.8 Mil.
Total Current Liabilities was $167.2 Mil.
Long-Term Debt was $181.3 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(97.561 / 672.063)||/||(93.319 / 494.087)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(90.887 / 494.087)||/||(111.148 / 672.063)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (227.134 + 234.962) / 865.652)||/||(1 - (151.186 + 204.728) / 759.368)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(42.509 / (42.509 + 204.728))||/||(80.928 / (80.928 + 234.962))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(273.309 / 672.063)||/||(209.752 / 494.087)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((166.25 + 180.846) / 865.652)||/||((181.25 + 167.245) / 759.368)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(4.098 - -0.011||-||137.305)||/||865.652|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
AthenaHealth Inc has a M-score of -3.13 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
AthenaHealth Inc Annual Data
AthenaHealth Inc Quarterly Data