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CVS Health Corp (NYSE:CVS)
Beneish M-Score
-2.53 (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.

CVS Health Corp has a M-score of -2.53 suggests that the company is not a manipulator.

CVS' s 10-Year Beneish M-Score Range
Min: -3.17   Max: 0.22
Current: -2.53

-3.17
0.22

During the past 13 years, the highest Beneish M-Score of CVS Health Corp was 0.22. The lowest was -3.17. And the median was -2.34.


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 CVS Health Corp 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 * 1.0363+0.528 * 1.0581+0.404 * 0.9627+0.892 * 1.1025+0.115 * 0.9926
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9453+4.679 * -0.0376-0.327 * 1.0778
=-2.53

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $10,892 Mil.
Revenue was 37169 + 36332 + 37055 + 35021 = $145,577 Mil.
Gross Profit was 6402 + 6164 + 6633 + 6468 = $25,667 Mil.
Total Current Assets was $26,401 Mil.
Total Assets was $74,668 Mil.
Property, Plant and Equipment(Net PPE) was $9,019 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,944 Mil.
Selling, General & Admin. Expense(SGA) was $16,706 Mil.
Total Current Liabilities was $20,386 Mil.
Long-Term Debt was $11,633 Mil.
Net Income was 1272 + 1221 + 1321 + 948 = $4,762 Mil.
Non Operating Income was 0 + 0 + 0 + -521 = $-521 Mil.
Cash Flow from Operations was 1037 + 1984 + 3423 + 1645 = $8,089 Mil.
Accounts Receivable was $9,533 Mil.
Revenue was 34602 + 32689 + 32782 + 31968 = $132,041 Mil.
Gross Profit was 6324 + 5942 + 6331 + 6035 = $24,632 Mil.
Total Current Assets was $24,138 Mil.
Total Assets was $72,593 Mil.
Property, Plant and Equipment(Net PPE) was $8,820 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,884 Mil.
Selling, General & Admin. Expense(SGA) was $16,029 Mil.
Total Current Liabilities was $16,629 Mil.
Long-Term Debt was $12,252 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)
=(10892 / 145577) / (9533 / 132041)
=0.07481951 / 0.07219727
=1.0363

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)
=(6164 / 132041) / (6402 / 145577)
=0.18654812 / 0.17631219
=1.0581

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 - (26401 + 9019) / 74668) / (1 - (24138 + 8820) / 72593)
=0.52563347 / 0.54598928
=0.9627

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
=145577 / 132041
=1.1025

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))
=(1884 / (1884 + 8820)) / (1944 / (1944 + 9019))
=0.17600897 / 0.17732373
=0.9926

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)
=(16706 / 145577) / (16029 / 132041)
=0.11475714 / 0.12139411
=0.9453

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)
=((11633 + 20386) / 74668) / ((12252 + 16629) / 72593)
=0.42881824 / 0.39784828
=1.0778

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
=(4762 - -521 - 8089) / 74668
=-0.0376

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.

CVS Health Corp has a M-score of -2.53 suggests that the company will not 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.

CVS Health Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.86211.09331.10391.02590.92421.10530.93111.30991.0094
GMI 1.00210.97771.26981.00920.98251.09441.05030.97421.0308
AQI 0.89591.22492.69440.93880.99040.9990.97780.92541.0104
SGI 1.20961.18411.74181.1460.97651.11081.14971.02951.0994
DEPI 0.85951.07310.76721.16240.99420.96020.92570.94650.9951
SGAI 1.04371.02330.698401.03570.90910.93381.00110.957
LVGI 0.86671.18740.72781.01180.92871.03361.06061.13631.047
TATA -0.0181-0.0077-0.0029-0.0121-0.0217-0.0371-0.0371-0.0167-0.04
M-score -2.53-2.24-0.80-2.22-2.67-2.41-2.58-2.34-2.56

CVS Health Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.99191.09141.20091.30991.30991.25841.25061.00941.00641.0363
GMI 0.99810.96730.9570.97410.99481.0131.0211.03081.04851.0581
AQI 1.0040.99030.95760.92540.95290.95980.96861.01040.97880.9627
SGI 1.0951.06121.04431.02951.04541.0681.07751.09941.11131.1025
DEPI 0.90480.92070.95630.94651.00570.99550.9810.99510.97560.9926
SGAI 0.97271.00261.0051.00120.9770.96340.97320.9570.95120.9453
LVGI 0.99590.97641.0171.13631.16921.19611.15291.0471.06451.0778
TATA -0.017-0.0096-0.0172-0.0167-0.0213-0.0196-0.0156-0.04-0.0364-0.0376
M-score -2.49-2.41-2.39-2.34-2.33-2.34-2.30-2.56-2.54-2.53
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