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Coventry Health Care, Inc. (NYSE:CVH)
Beneish M-Score
0.00 (As of Today)

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.

Coventry Health Care, Inc. has a M-score of -2.19 signals that the company is a manipulator.

CVH' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of Coventry Health Care, Inc. was 0.00. The lowest was 0.00. And the median was 0.00.


Definition

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 Coventry Health Care, 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 * 1.052+0.528 * 1.0941+0.404 * 1.0071+0.892 * 1.0867+0.115 * 0.933
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9555+4.679 * 0.02-0.327 * 0.9503
=-2.19

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar13) TTM:Last Year (Mar12) TTM:
Accounts Receivable was $1,206 Mil.
Revenue was 3520.235 + 3445.816 + 3457.783 + 3517.796 = $13,942 Mil.
Gross Profit was 774.099 + 766.803 + 716.818 + 693.498 = $2,951 Mil.
Total Current Assets was $3,054 Mil.
Total Assets was $8,955 Mil.
Property, Plant and Equipment(Net PPE) was $262 Mil.
Depreciation, Depletion and Amortization(DDA) was $154 Mil.
Selling, General & Admin. Expense(SGA) was $2,098 Mil.
Total Current Liabilities was $2,137 Mil.
Long-Term Debt was $1,585 Mil.
Net Income was 135.369 + 119.341 + 105.259 + 91.743 = $452 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 222.225 + 249.394 + -260.289 + 61.024 = $272 Mil.
Accounts Receivable was $1,055 Mil.
Revenue was 3691.967 + 3129.156 + 2975.543 + 3033.046 = $12,830 Mil.
Gross Profit was 815.667 + 723.334 + 718.464 + 714.059 = $2,972 Mil.
Total Current Assets was $3,119 Mil.
Total Assets was $9,018 Mil.
Property, Plant and Equipment(Net PPE) was $260 Mil.
Depreciation, Depletion and Amortization(DDA) was $137 Mil.
Selling, General & Admin. Expense(SGA) was $2,020 Mil.
Total Current Liabilities was $2,360 Mil.
Long-Term Debt was $1,585 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1206.027 / 13941.63) / (1054.978 / 12829.712)
=0.08650545 / 0.08222928
=1.052

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(766.803 / 12829.712) / (774.099 / 13941.63)
=0.23161268 / 0.21168386
=1.0941

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3053.929 + 261.668) / 8955.277) / (1 - (3118.818 + 259.704) / 9017.819)
=0.62976053 / 0.62535043
=1.0071

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=13941.63 / 12829.712
=1.0867

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))
=(137.352 / (137.352 + 259.704)) / (154.187 / (154.187 + 261.668))
=0.34592602 / 0.37077106
=0.933

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)
=(2097.649 / 13941.63) / (2020.339 / 12829.712)
=0.15045938 / 0.15747345
=0.9555

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)
=((1585.312 + 2137.486) / 8955.277) / ((1584.823 + 2360.217) / 9017.819)
=0.41570998 / 0.43747163
=0.9503

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(451.712 - 0 - 272.354) / 8955.277
=0.02

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.

Coventry Health Care, Inc. has a M-score of -2.19 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Coventry Health Care, Inc. Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
DSRI 0.78940.96051.60961.051.20641.17750.79051.25951.18531.0181
GMI 0.89830.96510.68021.05071.02271.21251.18620.76111.12821.1074
AQI 0.98990.79921.15220.86341.22820.92980.95290.99061.03631.0096
SGI 1.26791.17131.24461.16981.27751.20591.1670.83351.05171.1581
DEPI 1.00611.00321.7950.74480.86030.93750.9151.02621.00080.9577
SGAI 0.9790.96111.55280.96851.04610.96360.88651.0940.97710.891
LVGI 0.85260.91021.01521.00130.99551.06660.96290.93360.97740.9287
TATA -0.0368-0.0499-0.0619-0.08940.0064-0.0318-0.07830.01960.01610.0019
M-score -2.61-2.66-2.11-2.75-1.93-2.22-2.79-2.42-2.09-2.22

Coventry Health Care, Inc. Quarterly Data

Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13
DSRI 1.26661.23691.16851.06381.18531.15021.26881.51451.01811.052
GMI 0.77820.82880.92041.03821.12821.13281.14581.13951.10741.0941
AQI 0.99060.9290.94610.97241.03631.00571.01231.03431.00961.0071
SGI 0.82870.88770.94791.00761.05171.08931.11491.14191.15811.0867
DEPI 1.02621.28421.15621.19651.00080.96010.86220.78720.95770.933
SGAI 1.06991.03791.04211.00880.97710.94360.91660.90210.8910.9555
LVGI 0.93360.97030.9310.97450.97740.96081.00850.93850.92870.9503
TATA 0.0196-0.00420.0169-0.01260.0161-0.021-0.02540.05760.00190.02
M-score -2.40-2.47-2.32-2.44-2.09-2.27-2.17-1.51-2.22-2.19
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