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Digirad Corp (NAS:DRAD)
Beneish M-Score
-2.66 (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 Corp has a M-score of -2.66 suggests that the company is not a manipulator.

DRAD' s 10-Year Beneish M-Score Range
Min: -3.69   Max: 3.3
Current: -2.66

-3.69
3.3

During the past 13 years, the highest Beneish M-Score of Digirad Corp was 3.30. The lowest was -3.69. And the median was -2.97.


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 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 * 0.8698+0.528 * 0.9719+0.404 * 1.3713+0.892 * 1.1106+0.115 * 1.0669
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9796+4.679 * -0.0629-0.327 * 1.0247
=-2.66

* 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 $7.06 Mil.
Revenue was 13.839 + 14.143 + 13.881 + 14.587 = $56.45 Mil.
Gross Profit was 3.648 + 4.284 + 4.409 + 4.505 = $16.85 Mil.
Total Current Assets was $33.02 Mil.
Total Assets was $44.87 Mil.
Property, Plant and Equipment(Net PPE) was $5.20 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.97 Mil.
Selling, General & Admin. Expense(SGA) was $13.36 Mil.
Total Current Liabilities was $8.56 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.745 + 0.772 + 1.028 + 0.823 = $3.37 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.122 + 1.301 + 1.88 + 2.888 = $6.19 Mil.
Accounts Receivable was $7.31 Mil.
Revenue was 12.997 + 12.527 + 12.413 + 12.89 = $50.83 Mil.
Gross Profit was 3.442 + 3.688 + 3.818 + 3.793 = $14.74 Mil.
Total Current Assets was $31.66 Mil.
Total Assets was $40.56 Mil.
Property, Plant and Equipment(Net PPE) was $4.51 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.87 Mil.
Selling, General & Admin. Expense(SGA) was $12.28 Mil.
Total Current Liabilities was $7.55 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)
=(7.06 / 56.45) / (7.308 / 50.827)
=0.12506643 / 0.14378185
=0.8698

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)
=(4.284 / 50.827) / (3.648 / 56.45)
=0.29002302 / 0.29842338
=0.9719

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 - (33.016 + 5.197) / 44.87) / (1 - (31.657 + 4.514) / 40.559)
=0.14836193 / 0.10818807
=1.3713

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
=56.45 / 50.827
=1.1106

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))
=(1.873 / (1.873 + 4.514)) / (1.97 / (1.97 + 5.197))
=0.29325192 / 0.27487094
=1.0669

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)
=(13.362 / 56.45) / (12.281 / 50.827)
=0.23670505 / 0.24162355
=0.9796

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 + 8.555) / 44.87) / ((0 + 7.547) / 40.559)
=0.19066191 / 0.18607461
=1.0247

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
=(3.368 - 0 - 6.191) / 44.87
=-0.0629

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 Corp has a M-score of -2.66 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 Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.81120.87831.1021.00520.93531.23450.87771.06550.87770.9793
GMI 1.42820.84380.9551.11090.85951.36010.77811.05950.90660.9554
AQI 0.80581.13610.98620.43860.71640.77830.69821.39710.8226.5788
SGI 1.00071.05481.02811.08670.86610.80730.95660.93990.97751.1262
DEPI 0.64021.0731.36910.74720.96320.90231.0161.17150.99021.0921
SGAI 1.2340.98920.81560.95630.90161.16321.07580.98630.90.9266
LVGI 0.96691.0271.00411.00780.79091.01591.05921.09680.99721.0759
TATA -0.1296-0.0934-0.0868-0.1499-0.0724-0.1229-0.0862-0.0856-0.0467-0.0431
M-score -3.18-3.011.32-3.29-3.11-2.96-3.30-2.69-2.94-0.36

Digirad Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.06550.86880.96430.87670.87771.21320.90981.00210.97930.8698
GMI 1.05941.13841.14191.05150.90660.85950.85190.87990.95540.9719
AQI 1.39711.38591.69721.60260.8226.58755.53375.96936.57881.3713
SGI 0.93980.93430.96611.00990.97751.03541.06611.08281.12621.1106
DEPI 1.17151.12051.04420.95850.99021.05631.05251.13991.09211.0669
SGAI 0.98620.92020.89650.8570.90010.87230.83140.86480.92660.9796
LVGI 1.09681.10091.14091.06470.99720.95050.88651.01961.07591.0247
TATA -0.085-0.1141-0.1092-0.0892-0.04670.0235-0.0218-0.0444-0.0431-0.0629
M-score -2.69-2.97-2.72-2.73-2.940.09-0.78-0.63-0.36-2.66
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