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CVS Health Corp (NYSE:CVS)
Beneish M-Score
-2.70 (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 -2.70 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: -2.7

-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 -2.38.


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 * 0.9193+0.528 * 1.0484+0.404 * 1.0036+0.892 * 1.1575+0.115 * 0.8829
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9495+4.679 * -0.0613-0.327 * 1.0653
=-2.70

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $13,625 Mil.
Revenue was 44615 + 43725 + 43215 + 41146 = $172,701 Mil.
Gross Profit was 7492 + 7015 + 6744 + 7301 = $28,552 Mil.
Total Current Assets was $30,939 Mil.
Total Assets was $94,156 Mil.
Property, Plant and Equipment(Net PPE) was $9,901 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,429 Mil.
Selling, General & Admin. Expense(SGA) was $18,480 Mil.
Total Current Liabilities was $26,741 Mil.
Long-Term Debt was $25,610 Mil.
Net Income was 1540 + 924 + 1146 + 1498 = $5,108 Mil.
Non Operating Income was -101 + -542 + 0 + 0 = $-643 Mil.
Cash Flow from Operations was 3925 + 1611 + 2412 + 3571 = $11,519 Mil.
Accounts Receivable was $12,804 Mil.
Revenue was 38644 + 37169 + 36332 + 37055 = $149,200 Mil.
Gross Profit was 6661 + 6402 + 6164 + 6633 = $25,860 Mil.
Total Current Assets was $30,753 Mil.
Total Assets was $92,362 Mil.
Property, Plant and Equipment(Net PPE) was $9,494 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,999 Mil.
Selling, General & Admin. Expense(SGA) was $16,814 Mil.
Total Current Liabilities was $21,434 Mil.
Long-Term Debt was $26,771 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)
=(13625 / 172701) / (12804 / 149200)
=0.07889358 / 0.08581769
=0.9193

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)
=(25860 / 149200) / (28552 / 172701)
=0.1733244 / 0.1653262
=1.0484

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 - (30939 + 9901) / 94156) / (1 - (30753 + 9494) / 92362)
=0.56625175 / 0.5642472
=1.0036

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
=172701 / 149200
=1.1575

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))
=(1999 / (1999 + 9494)) / (2429 / (2429 + 9901))
=0.17393196 / 0.19699919
=0.8829

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)
=(18480 / 172701) / (16814 / 149200)
=0.10700575 / 0.11269437
=0.9495

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)
=((25610 + 26741) / 94156) / ((26771 + 21434) / 92362)
=0.5560028 / 0.52191377
=1.0653

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
=(5108 - -643 - 11519) / 94156
=-0.0613

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 -2.70 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 local exchange's currency.

CVS Health Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09331.10391.02590.90270.92551.09820.93191.30861.00941.1157
GMI 0.97771.26981.00921.00880.98191.09941.05130.97351.03081.0518
AQI 1.22492.69440.93880.98550.99040.9990.97330.92971.00971.0893
SGI 1.18411.74181.1461.12280.97521.1181.14981.02961.09941.0999
DEPI 1.07310.76721.16240.90870.99420.96020.92570.94650.99511.0235
SGAI 1.02330.69840.94431.01351.03640.90390.93371.0010.9570.9369
LVGI 1.18740.72781.01180.96640.92871.03361.07221.1241.04571.2942
TATA -0.0182-0.0108-0.0121-0.0055-0.0217-0.0371-0.0371-0.0167-0.0401-0.0343
M-score -2.29-0.83-2.38-2.49-2.67-2.40-2.59-2.34-2.56-2.46

CVS Health Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.2581.24961.00941.00651.03641.07111.11571.14441.05680.9193
GMI 1.01251.02041.03081.04871.0581.07041.05181.05731.06041.0484
AQI 0.95980.96861.00970.97880.96271.04981.08931.07981.09371.0036
SGI 1.06831.07841.09941.11121.10241.1041.09991.121.14531.1575
DEPI 0.99550.9810.99510.97560.99261.03111.02350.97860.93050.8829
SGAI 1.93551.30640.9570.95130.94540.92990.93690.94250.94780.9495
LVGI 1.19611.15291.04571.06451.07781.28331.29421.29121.31171.0653
TATA -0.0196-0.0155-0.0401-0.0364-0.0376-0.0347-0.0343-0.0397-0.0438-0.0613
M-score -2.51-2.36-2.56-2.54-2.53-2.50-2.46-2.45-2.53-2.70
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