Switch to:
CVS Health Corp (NYSE:CVS)
Beneish M-Score
-2.46 (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 -2.46 suggests that the company is not a manipulator.

CVS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.07   Max: -0.83
Current: -2.46

-3.07
-0.83

During the past 13 years, the highest Beneish M-Score of CVS Health Corp was -0.83. The lowest was -3.07. And the median was -2.42.


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 * 1.1157+0.528 * 1.0518+0.404 * 1.0751+0.892 * 1.0999+0.115 * 1.0235
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9369+4.679 * -0.0339-0.327 * 1.2773
=-2.46

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $11,888 Mil.
Revenue was 41146 + 38644 + 37169 + 36332 = $153,291 Mil.
Gross Profit was 7301 + 6661 + 6402 + 6164 = $26,528 Mil.
Total Current Assets was $30,378 Mil.
Total Assets was $93,657 Mil.
Property, Plant and Equipment(Net PPE) was $9,855 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,092 Mil.
Selling, General & Admin. Expense(SGA) was $17,074 Mil.
Total Current Liabilities was $23,169 Mil.
Long-Term Debt was $26,267 Mil.
Net Income was 1498 + 1246 + 1272 + 1221 = $5,237 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 3571 + 1820 + 1037 + 1984 = $8,412 Mil.
Accounts Receivable was $9,687 Mil.
Revenue was 37055 + 35021 + 34602 + 32689 = $139,367 Mil.
Gross Profit was 6633 + 6468 + 6324 + 5942 = $25,367 Mil.
Total Current Assets was $25,983 Mil.
Total Assets was $74,187 Mil.
Property, Plant and Equipment(Net PPE) was $8,843 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,931 Mil.
Selling, General & Admin. Expense(SGA) was $16,568 Mil.
Total Current Liabilities was $19,027 Mil.
Long-Term Debt was $11,630 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)
=(11888 / 153291) / (9687 / 139367)
=0.07755185 / 0.06950713
=1.1157

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)
=(6661 / 139367) / (7301 / 153291)
=0.18201583 / 0.17305647
=1.0518

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 - (30378 + 9855) / 93657) / (1 - (25983 + 8843) / 74187)
=0.57042186 / 0.53056465
=1.0751

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
=153291 / 139367
=1.0999

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))
=(1931 / (1931 + 8843)) / (2092 / (2092 + 9855))
=0.17922777 / 0.17510672
=1.0235

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)
=(17074 / 153291) / (16568 / 139367)
=0.11138293 / 0.11888037
=0.9369

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 + 23169) / 93657) / ((11630 + 19027) / 74187)
=0.52784095 / 0.41323952
=1.2773

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
=(5237 - 0 - 8412) / 93657
=-0.0339

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 -2.46 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 1.09351.10371.02590.8980.92421.10530.93191.30871.00941.1157
GMI 0.98191.29131.00921.0130.98251.09441.05030.97421.03081.0518
AQI 1.22492.69440.93880.98550.99040.9990.97330.92971.00971.0751
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 1.18740.72781.01180.96640.92871.03361.07221.1241.04571.2773
TATA -0.0182-0.0108-0.0121-0.0055-0.0217-0.0371-0.0369-0.0167-0.0401-0.0339
M-score -2.29-0.83-2.38-2.48-2.67-2.41-2.59-2.34-2.56-2.46

CVS Health Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.20131.30861.30951.2581.24961.00941.00651.03641.07111.1157
GMI 0.95770.97350.99391.01251.02041.03081.04871.0581.07041.0518
AQI 0.95760.92970.95290.95980.96861.00970.97880.96271.04981.0751
SGI 1.0441.02961.04571.06831.07841.09941.11121.10241.1041.0999
DEPI 0.95630.94651.00570.99550.9810.99510.97560.99261.03111.0235
SGAI 1.00792.0531.97961.93551.30640.9570.95130.94540.92990.9369
LVGI 1.0171.1241.16921.19611.15291.04571.06451.07781.28331.2773
TATA -0.0175-0.0167-0.0213-0.0196-0.0155-0.0401-0.0364-0.0376-0.0347-0.0339
M-score -2.39-2.52-2.50-2.51-2.36-2.56-2.54-2.53-2.50-2.46
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK