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CVS Health Corp (NYSE:CVS)
Beneish M-Score
-2.54 (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 -2.54 suggests that the company is not a manipulator.

CVS' s 10-Year Beneish M-Score Range
Min: -3.17   Max: 0.22
Current: -2.54

-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 -2.35.


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 * 1.0065+0.528 * 1.0487+0.404 * 0.9788+0.892 * 1.1112+0.115 * 0.9756
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9513+4.679 * -0.0364-0.327 * 1.0645
=-2.54

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was 1221 + 1321 + 948 + 1246 = $4,736 Mil.
Non Operating Income was 0 + 0 + -521 + 0 = $-521 Mil.
Cash Flow from Operations was 1984 + 3423 + 1645 + 897 = $7,949 Mil.
Accounts Receivable was $9,086 Mil.
Revenue was 32689 + 32830 + 31932 + 31248 = $128,699 Mil.
Gross Profit was 5942 + 6339 + 6027 + 5841 = $24,149 Mil.
Total Current Assets was $24,460 Mil.
Total Assets was $72,822 Mil.
Property, Plant and Equipment(Net PPE) was $8,676 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,845 Mil.
Selling, General & Admin. Expense(SGA) was $15,782 Mil.
Total Current Liabilities was $16,213 Mil.
Long-Term Debt was $12,845 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)
=(10162 / 143010) / (9086 / 128699)
=0.07105797 / 0.07059884
=1.0065

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)
=(6633 / 128699) / (6164 / 143010)
=0.18763938 / 0.17893154
=1.0487

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 - (25622 + 8871) / 73930) / (1 - (24460 + 8676) / 72822)
=0.53343704 / 0.54497267
=0.9788

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
=143010 / 128699
=1.1112

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))
=(1845 / (1845 + 8676)) / (1944 / (1944 + 8871))
=0.17536356 / 0.17975035
=0.9756

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)
=(16682 / 143010) / (15782 / 128699)
=0.11664919 / 0.12262722
=0.9513

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)
=((11689 + 19713) / 73930) / ((12845 + 16213) / 72822)
=0.42475314 / 0.39902777
=1.0645

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
=(4736 - -521 - 7949) / 73930
=-0.0364

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 -2.54 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 0.86211.09331.10391.02590.92551.0980.9321.30861.0094
GMI 1.00210.97771.26981.00920.98191.09961.05110.97351.0308
AQI 0.89591.22492.69440.93880.99040.9990.97330.92971.0104
SGI 1.20961.18411.74181.1460.97521.11821.14961.02961.0994
DEPI 0.85951.07310.76721.16240.99420.96020.92570.94650.9951
SGAI 1.04371.02330.698401.03640.90370.93391.0010.957
LVGI 0.86671.18740.72781.01180.92871.03361.07221.1241.047
TATA -0.0181-0.0077-0.0029-0.0121-0.0217-0.0371-0.0371-0.0167-0.04
M-score -2.53-2.24-0.80-2.22-2.67-2.40-2.59-2.34-2.56

CVS Health Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.9320.99021.09171.20151.30861.30951.2581.24961.00941.0065
GMI 1.05111.00030.96790.95750.97350.99391.01251.02041.03081.0487
AQI 0.97331.0040.99030.95760.92970.95290.95980.96861.01040.9788
SGI 1.14961.09691.0611.04381.02961.04571.06831.07841.09941.1112
DEPI 0.92570.90480.92070.95630.94651.00570.99550.9810.99510.9756
SGAI 0.45540.47930.4991.00812.0531.97961.93551.30640.9570.9513
LVGI 1.07220.99590.97641.0171.1241.16921.19611.15291.0471.0645
TATA -0.0371-0.0172-0.0098-0.0175-0.0167-0.0213-0.0196-0.0155-0.04-0.0364
M-score -2.50-2.40-2.32-2.39-2.52-2.50-2.51-2.36-2.56-2.54
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