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Digirad Corp (NAS:DRAD)
Beneish M-Score
-2.37 (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 -2.37 suggests that the company is not a manipulator.

DRAD' s 10-Year Beneish M-Score Range
Min: -3.69   Max: 3.3
Current: -2.37

-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 -2.96.


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 * 1.0669+0.528 * 0.9873+0.404 * 1.38+0.892 * 1.093+0.115 * 1.1376
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0096+4.679 * -0.0356-0.327 * 1.0845
=-2.37

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $7.25 Mil.
Revenue was 15.547 + 13.839 + 14.143 + 13.881 = $57.41 Mil.
Gross Profit was 4.767 + 3.648 + 4.284 + 4.409 = $17.11 Mil.
Total Current Assets was $33.84 Mil.
Total Assets was $46.42 Mil.
Property, Plant and Equipment(Net PPE) was $6.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.08 Mil.
Selling, General & Admin. Expense(SGA) was $13.40 Mil.
Total Current Liabilities was $9.30 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 1.097 + 0.745 + 0.772 + 1.028 = $3.64 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 2.124 + 0.122 + 1.301 + 1.749 = $5.30 Mil.
Accounts Receivable was $6.22 Mil.
Revenue was 14.587 + 12.997 + 12.527 + 12.413 = $52.52 Mil.
Gross Profit was 4.505 + 3.442 + 3.688 + 3.818 = $15.45 Mil.
Total Current Assets was $32.02 Mil.
Total Assets was $40.78 Mil.
Property, Plant and Equipment(Net PPE) was $4.59 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.89 Mil.
Selling, General & Admin. Expense(SGA) was $12.14 Mil.
Total Current Liabilities was $7.53 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)
=(7.252 / 57.41) / (6.219 / 52.524)
=0.12631946 / 0.11840302
=1.0669

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)
=(3.648 / 52.524) / (4.767 / 57.41)
=0.29420836 / 0.29799686
=0.9873

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 - (33.835 + 6.034) / 46.424) / (1 - (32.017 + 4.586) / 40.775)
=0.14119852 / 0.1023176
=1.38

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
=57.41 / 52.524
=1.093

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))
=(1.885 / (1.885 + 4.586)) / (2.077 / (2.077 + 6.034))
=0.29129964 / 0.256072
=1.1376

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)
=(13.395 / 57.41) / (12.139 / 52.524)
=0.23332172 / 0.2311134
=1.0096

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 + 9.303) / 46.424) / ((0 + 7.534) / 40.775)
=0.20039204 / 0.18477008
=1.0845

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
=(3.642 - 0 - 5.296) / 46.424
=-0.0356

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 -2.37 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.86880.96430.87670.87771.21320.90981.00210.97930.86981.0669
GMI 1.13841.14191.05150.90660.85950.85190.87990.95540.97190.9873
AQI 1.38591.69721.60260.8226.58755.53375.96936.57881.37131.38
SGI 0.93430.96611.00990.97751.03541.06611.08281.12621.11061.093
DEPI 1.12051.04420.95850.99021.05631.05251.13991.09211.06691.1376
SGAI 0.92020.89650.8570.90010.87230.83140.86480.92660.97961.0096
LVGI 1.10091.14091.06470.99720.95050.88651.01961.07591.02471.0845
TATA -0.1141-0.1092-0.0892-0.04670.0235-0.025-0.0444-0.0431-0.0629-0.0356
M-score -2.97-2.72-2.73-2.940.09-0.80-0.63-0.36-2.66-2.37
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