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CVS Health Corp (NYSE:CVS)
Beneish M-Score
-2.45 (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 -2.45 suggests that the company is not a manipulator.

CVS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: 0.2
Current: -2.45

-3.17
0.2

During the past 13 years, the highest Beneish M-Score of CVS Health Corp was 0.20. The lowest was -3.17. And the median was -2.37.


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 * 1.1444+0.528 * 1.0573+0.404 * 1.0798+0.892 * 1.12+0.115 * 0.9786
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9425+4.679 * -0.0397-0.327 * 1.2912
=-2.45

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $13,025 Mil.
Revenue was 43215 + 41146 + 38644 + 37169 = $160,174 Mil.
Gross Profit was 6744 + 7301 + 6661 + 6402 = $27,108 Mil.
Total Current Assets was $29,413 Mil.
Total Assets was $92,634 Mil.
Property, Plant and Equipment(Net PPE) was $9,862 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,219 Mil.
Selling, General & Admin. Expense(SGA) was $17,610 Mil.
Total Current Liabilities was $24,537 Mil.
Long-Term Debt was $26,267 Mil.
Net Income was 1146 + 1498 + 1246 + 1272 = $5,162 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2412 + 3571 + 1820 + 1037 = $8,840 Mil.
Accounts Receivable was $10,162 Mil.
Revenue was 36332 + 37055 + 35021 + 34602 = $143,010 Mil.
Gross Profit was 6164 + 6633 + 6468 + 6324 = $25,589 Mil.
Total Current Assets was $25,622 Mil.
Total Assets was $73,930 Mil.
Property, Plant and Equipment(Net PPE) was $8,871 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,944 Mil.
Selling, General & Admin. Expense(SGA) was $16,682 Mil.
Total Current Liabilities was $19,713 Mil.
Long-Term Debt was $11,689 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)
=(13025 / 160174) / (10162 / 143010)
=0.08131782 / 0.07105797
=1.1444

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)
=(7301 / 143010) / (6744 / 160174)
=0.17893154 / 0.16924095
=1.0573

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 - (29413 + 9862) / 92634) / (1 - (25622 + 8871) / 73930)
=0.5760196 / 0.53343704
=1.0798

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
=160174 / 143010
=1.12

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))
=(1944 / (1944 + 8871)) / (2219 / (2219 + 9862))
=0.17975035 / 0.18367685
=0.9786

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)
=(17610 / 160174) / (16682 / 143010)
=0.10994294 / 0.11664919
=0.9425

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)
=((26267 + 24537) / 92634) / ((11689 + 19713) / 73930)
=0.54843794 / 0.42475314
=1.2912

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
=(5162 - 0 - 8840) / 92634
=-0.0397

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 -2.45 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09351.10371.02590.8980.92421.10530.93111.30991.00941.1157
GMI 0.98191.29131.00921.0130.98251.09441.05030.97421.03081.0518
AQI 1.22492.69440.93880.98550.99040.9990.97780.92541.01041.0743
SGI 1.1841.74211.1461.12870.97651.11081.14971.02951.09941.0999
DEPI 1.07310.76721.16220.90880.99420.96020.92570.94650.99511.0235
SGAI 1.01510.7410.94431.00821.03570.90910.93381.00110.9570.9369
LVGI 1.18740.72781.01180.96640.92871.03361.06061.13631.0471.2757
TATA -0.0182-0.0108-0.0121-0.0055-0.0217-0.0371-0.0371-0.0167-0.04-0.0339
M-score -2.29-0.83-2.38-2.48-2.67-2.41-2.58-2.34-2.56-2.46

CVS Health Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.30991.30991.25841.25061.00941.00641.03631.07071.11571.1444
GMI 0.97410.99481.0131.0211.03081.04851.05811.07051.05181.0573
AQI 0.92540.95290.95980.96861.01040.97880.96271.04981.07431.0798
SGI 1.02951.04541.0681.07751.09941.11131.10251.10441.09991.12
DEPI 0.94651.00570.99550.9810.99510.97560.99261.03111.02350.9786
SGAI 1.00120.9770.96340.97320.9570.95120.94530.92960.93690.9425
LVGI 1.13631.16921.19611.15291.0471.06451.07781.28331.27571.2912
TATA -0.0167-0.0213-0.0196-0.0156-0.04-0.0364-0.0376-0.0347-0.0339-0.0397
M-score -2.34-2.33-2.34-2.30-2.56-2.54-2.53-2.50-2.46-2.45
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