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D.R. Horton Inc (NYSE:DHI)
Beneish M-Score
-2.26 (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.

D.R. Horton Inc has a M-score of -2.26 suggests that the company is not a manipulator.

DHI' s Beneish M-Score Range Over the Past 10 Years
Min: -8.92   Max: 0.04
Current: -2.26

-8.92
0.04

During the past 13 years, the highest Beneish M-Score of D.R. Horton Inc was 0.04. The lowest was -8.92. And the median was -1.84.


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 D.R. Horton Inc 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+0.528 * 0.985+0.404 * 0.9687+0.892 * 1.1447+0.115 * 0.8055
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9635+4.679 * 0.0194-0.327 * 0.8755
=-2.26

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 3231.9 + 2767.9 + 2416.4 + 3172.4 = $11,589 Mil.
Gross Profit was 708.9 + 598.6 + 524.2 + 663.6 = $2,495 Mil.
Total Current Assets was $9,423 Mil.
Total Assets was $11,333 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General & Admin. Expense(SGA) was $1,259 Mil.
Total Current Liabilities was $4,275 Mil.
Long-Term Debt was $504 Mil.
Net Income was 249.8 + 195.1 + 157.7 + 238.9 = $842 Mil.
Non Operating Income was 3.8 + 9.6 + 3.4 + 4.5 = $21 Mil.
Cash Flow from Operations was 61.7 + 28.4 + -1.5 + 511.8 = $600 Mil.
Accounts Receivable was $0 Mil.
Revenue was 2950.8 + 2398 + 2302.6 + 2472.4 = $10,124 Mil.
Gross Profit was 630.4 + 506 + 488.2 + 522.7 = $2,147 Mil.
Total Current Assets was $8,929 Mil.
Total Assets was $10,864 Mil.
Property, Plant and Equipment(Net PPE) was $249 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $1,141 Mil.
Total Current Liabilities was $1,411 Mil.
Long-Term Debt was $3,821 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)
=(0 / 11588.6) / (0 / 10123.8)
=0 / 0
=1

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)
=(2147.3 / 10123.8) / (2495.3 / 11588.6)
=0.21210415 / 0.21532368
=0.985

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 - (9422.8 + 206.3) / 11333.2) / (1 - (8928.5 + 248.8) / 10863.5)
=0.15036353 / 0.15521701
=0.9687

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
=11588.6 / 10123.8
=1.1447

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))
=(51.5 / (51.5 + 248.8)) / (55.8 / (55.8 + 206.3))
=0.17149517 / 0.21289584
=0.8055

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)
=(1258.6 / 11588.6) / (1141.2 / 10123.8)
=0.10860673 / 0.11272447
=0.9635

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)
=((504.2 + 4275.1) / 11333.2) / ((3821.1 + 1411.4) / 10863.5)
=0.4217079 / 0.48165877
=0.8755

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
=(841.5 - 21.3 - 600.4) / 11333.2
=0.0194

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.

D.R. Horton Inc has a M-score of -2.26 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.

D.R. Horton Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 11110.04540.93770.97011
GMI 1.13313.0915-0.2918-7.5710.18511.04080.85250.88111.02621.0352
AQI 0.7650.93651.28650.52961.17231.11860.86791.37180.9441.0171
SGI 1.08570.75050.58830.55031.2030.82651.19721.43761.28211.3488
DEPI 1.08770.86630.82571.45131.31980.90821.24841.19791.02490.6135
SGAI 1.11191.04041.17041.22460.8371.1120.92220.86790.98260.9108
LVGI 1.00370.91591.23071.05710.84050.91410.98761.07410.91050.9485
TATA 0.1444-0.179-0.585-0.2638-0.09140.00990.17060.18940.1160.0029
M-score -1.76-2.46-6.28-8.84-3.85-2.58-1.62-2.01-1.66-2.14

D.R. Horton Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1111111111
GMI 0.90580.99051.02631.07741.12151.04761.03531.00440.97310.985
AQI 1.30290.8940.9441.69811.02411.53911.01710.98790.99060.9687
SGI 1.341.29231.28211.30081.33941.36581.34881.26341.21331.1447
DEPI 1.21781.13951.02490.91870.90770.89610.61350.55590.59470.8055
SGAI 0.93240.9730.98250.97190.96220.92320.91070.92340.92410.9635
LVGI 0.98290.91530.91050.93470.92170.99570.94850.92670.89740.8755
TATA 0.12590.11940.1160.12770.10430.05150.0029-0.007-0.00920.0194
M-score -1.47-1.66-1.66-1.27-1.59-1.67-2.14-2.29-2.35-2.26
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