Switch to:
Digirad Corporation (NAS:DRAD)
Beneish M-Score
-2.93 (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.

Digirad Corporation has a M-score of -2.93 suggests that the company is not a manipulator.

DRAD' s 10-Year Beneish M-Score Range
Min: -3.3   Max: 1.32
Current: -2.93

-3.3
1.32

During the past 13 years, the highest Beneish M-Score of Digirad Corporation was 1.32. The lowest was -3.30. And the median was -2.98.


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 Digirad Corporation 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 * 0.8777+0.528 * 0.9066+0.404 * 0.822+0.892 * 0.9775+0.115 * 0.9902
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9001+4.679 * -0.0461-0.327 * 0.9972
=-2.93

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $5.43 Mil.
Revenue was 12.527 + 12.413 + 12.89 + 11.546 = $49.38 Mil.
Gross Profit was 3.688 + 3.818 + 3.793 + 2.817 = $14.12 Mil.
Total Current Assets was $36.67 Mil.
Total Assets was $41.45 Mil.
Property, Plant and Equipment(Net PPE) was $4.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.91 Mil.
Selling, General & Admin. Expense(SGA) was $12.53 Mil.
Total Current Liabilities was $7.63 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.787 + 2.512 + -0.616 + -2.419 = $0.26 Mil.
Non Operating Income was 0 + 0 + 0.004 + -0.032 = $-0.03 Mil.
Cash Flow from Operations was 1.382 + 2.383 + -0.395 + -1.169 = $2.20 Mil.
Accounts Receivable was $6.33 Mil.
Revenue was 13.016 + 11.817 + 12.71 + 12.969 = $50.51 Mil.
Gross Profit was 2.61 + 3.129 + 3.681 + 3.672 = $13.09 Mil.
Total Current Assets was $39.39 Mil.
Total Assets was $44.91 Mil.
Property, Plant and Equipment(Net PPE) was $4.69 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.13 Mil.
Selling, General & Admin. Expense(SGA) was $14.24 Mil.
Total Current Liabilities was $8.28 Mil.
Long-Term Debt was $0.00 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)
=(5.43 / 49.376) / (6.329 / 50.512)
=0.10997246 / 0.12529696
=0.8777

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)
=(3.818 / 50.512) / (3.688 / 49.376)
=0.25918594 / 0.28588788
=0.9066

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 - (36.669 + 4.153) / 41.451) / (1 - (39.387 + 4.693) / 44.909)
=0.01517454 / 0.01845955
=0.822

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
=49.376 / 50.512
=0.9775

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))
=(2.131 / (2.131 + 4.693)) / (1.913 / (1.913 + 4.153))
=0.31228019 / 0.31536433
=0.9902

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)
=(12.529 / 49.376) / (14.24 / 50.512)
=0.25374676 / 0.28191321
=0.9001

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)
=((0 + 7.625) / 41.451) / ((0 + 8.284) / 44.909)
=0.18395214 / 0.18446191
=0.9972

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
=(0.264 - -0.028 - 2.201) / 41.451
=-0.0461

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.

Digirad Corporation has a M-score of -2.93 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.

Digirad Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.67790.81120.87831.1021.00520.93531.23450.87771.06550.8777
GMI 0.92261.42820.84380.9551.11090.85951.36010.77811.05950.9066
AQI 0.42810.80581.13610.98620.43860.71640.77830.69821.39710.822
SGI 1.21161.00071.05481.02811.08670.86610.80730.95660.93990.9775
DEPI 1.07470.64021.0731.36910.74720.96320.90231.0161.17150.9902
SGAI 1.05251.2340.98920.81560.95630.90161.16321.07580.98630.9
LVGI 0.26010.96691.0271.00411.00780.79091.01591.05921.09680.9972
TATA -0.0667-0.1296-0.0934-0.0868-0.1499-0.0724-0.1229-0.0862-0.0856-0.0467
M-score -2.93-3.18-3.011.32-3.29-3.11-2.96-3.30-2.69-2.94

Digirad Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95930.87770.92190.94211.10711.06550.86880.96430.87670.8777
GMI 0.83760.7780.77430.88210.98271.05941.13841.14191.05150.9066
AQI 0.72290.69820.69910.70470.6731.39711.38591.69721.60260.822
SGI 0.97570.95660.95020.90460.87360.93980.93430.96611.00990.9775
DEPI 0.93981.0161.11421.25681.23041.17151.12051.04420.95850.9902
SGAI 0.94991.07561.14251.21741.2680.98620.92020.89650.8570.9001
LVGI 1.02981.05921.02271.06241.1911.09681.10091.14091.06470.9972
TATA -0.0984-0.0862-0.0714-0.0678-0.0652-0.085-0.1133-0.1085-0.0885-0.0461
M-score -3.21-3.30-3.19-3.15-3.02-2.69-2.97-2.72-2.73-2.93
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)
Free 7-day Trial
FEEDBACK
Hide