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Digirad Corp (NAS:DRAD)
Beneish M-Score
-0.08 (As of Today)

Warning Sign:

Beneish M-Score -0.08 higher than -2.22, which implies that it might have manipulated its financial results.

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 -0.08 signals that the company is a manipulator.

DRAD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.69   Max: 3.3
Current: -0.08

-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 -2.94.


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 * 1.415+0.528 * 0.9997+0.404 * 3.0236+0.892 * 1.3843+0.115 * 2.2637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0969+4.679 * 0.2419-0.327 * 2.2203
=-0.08

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $13.83 Mil.
Revenue was 31.157 + 15.577 + 15.862 + 15.547 = $78.14 Mil.
Gross Profit was 9.065 + 4.692 + 4.802 + 4.767 = $23.33 Mil.
Total Current Assets was $32.24 Mil.
Total Assets was $116.44 Mil.
Property, Plant and Equipment(Net PPE) was $31.97 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.42 Mil.
Selling, General & Admin. Expense(SGA) was $20.29 Mil.
Total Current Liabilities was $23.16 Mil.
Long-Term Debt was $26.13 Mil.
Net Income was 11.609 + 0.678 + 19.12 + 1.097 = $32.50 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.736 + 0.755 + 0.719 + 2.124 = $4.33 Mil.
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.



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)
=(13.829 / 78.143) / (7.06 / 56.45)
=0.17697043 / 0.12506643
=1.415

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)
=(16.846 / 56.45) / (23.326 / 78.143)
=0.29842338 / 0.29850402
=0.9997

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 - (32.237 + 31.967) / 116.435) / (1 - (33.016 + 5.197) / 44.87)
=0.44858505 / 0.14836193
=3.0236

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
=78.143 / 56.45
=1.3843

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))
=(1.97 / (1.97 + 5.197)) / (4.418 / (4.418 + 31.967))
=0.27487094 / 0.12142366
=2.2637

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)
=(20.29 / 78.143) / (13.362 / 56.45)
=0.25965218 / 0.23670505
=1.0969

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)
=((26.127 + 23.164) / 116.435) / ((0 + 8.555) / 44.87)
=0.42333491 / 0.19066191
=2.2203

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
=(32.504 - 0 - 4.334) / 116.435
=0.2419

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 -0.08 signals that the company is likely to 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.87831.1021.00520.93531.23450.87771.06550.87770.97931.1104
GMI 0.84380.9551.11090.85951.36010.77811.05950.90660.95541.0163
AQI 1.13610.98620.43860.71640.77830.69821.39710.8226.57884.08
SGI 1.05481.02811.08670.86610.80730.95660.93990.97751.12621.0938
DEPI 1.0731.36910.74720.96320.90231.0161.17150.99021.09211.0284
SGAI 0.98920.81560.95630.90161.16321.07580.98630.90.92661.0229
LVGI 1.0271.00411.00780.79091.01591.05921.09680.99721.07590.6861
TATA -0.0934-0.0868-0.1096-0.0726-0.1229-0.0862-0.0873-0.0467-0.04310.2795
M-score -3.011.32-3.10-3.11-2.96-3.30-2.70-2.94-0.360.37

Digirad Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.87771.21320.90981.00210.97930.86981.06691.14611.11041.415
GMI 0.90660.85950.85190.87990.95540.97190.98731.00841.01630.9997
AQI 0.8226.58755.53375.96936.57881.37131.383.81784.083.0236
SGI 0.97751.03541.06611.08281.12621.11061.0931.11.09381.3843
DEPI 0.99021.05631.05251.13991.09211.06691.13761.10521.02842.2637
SGAI 0.90010.87230.83140.86480.92660.97961.00961.00791.0231.0969
LVGI 0.99720.95050.88651.01961.07591.02471.08450.73970.68612.2203
TATA -0.04670.0235-0.025-0.0444-0.0431-0.0629-0.03560.26650.27950.2419
M-score -2.940.09-0.80-0.63-0.36-2.66-2.370.230.37-0.08
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