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Digirad Corp (NAS:DRAD)
Beneish M-Score
-0.36 (As of Today)

Warning Sign:

Beneish M-Score -0.36 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 -0.36 signals that the company is a manipulator.

DRAD' s 10-Year Beneish M-Score Range
Min: -3.3   Max: 1.32
Current: -0.36

-3.3
1.32

During the past 13 years, the highest Beneish M-Score of Digirad Corp was 1.32. The lowest was -3.30. And the median was -2.95.


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 * 0.9793+0.528 * 0.9554+0.404 * 6.5788+0.892 * 1.1262+0.115 * 1.0921
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9266+4.679 * -0.0431-0.327 * 1.0759
=-0.36

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $5.99 Mil.
Revenue was 14.143 + 13.881 + 14.587 + 12.997 = $55.61 Mil.
Gross Profit was 4.284 + 4.409 + 4.505 + 3.442 = $16.64 Mil.
Total Current Assets was $32.95 Mil.
Total Assets was $41.90 Mil.
Property, Plant and Equipment(Net PPE) was $4.77 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.94 Mil.
Selling, General & Admin. Expense(SGA) was $13.07 Mil.
Total Current Liabilities was $8.29 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.772 + 1.028 + 0.823 + -0.148 = $2.48 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.301 + 1.88 + 2.888 + -1.789 = $4.28 Mil.
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.



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)
=(5.989 / 55.608) / (5.43 / 49.376)
=0.10770033 / 0.10997246
=0.9793

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)
=(4.409 / 49.376) / (4.284 / 55.608)
=0.28588788 / 0.29923752
=0.9554

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 - (32.952 + 4.766) / 41.901) / (1 - (36.669 + 4.153) / 41.451)
=0.09983055 / 0.01517454
=6.5788

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
=55.608 / 49.376
=1.1262

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))
=(1.913 / (1.913 + 4.153)) / (1.935 / (1.935 + 4.766))
=0.31536433 / 0.28876287
=1.0921

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)
=(13.074 / 55.608) / (12.529 / 49.376)
=0.23511006 / 0.25374676
=0.9266

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 + 8.293) / 41.901) / ((0 + 7.625) / 41.451)
=0.1979189 / 0.18395214
=1.0759

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
=(2.475 - 0 - 4.28) / 41.901
=-0.0431

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 -0.36 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

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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.10711.06550.86880.96430.87670.87771.21320.90981.00210.9793
GMI 0.98271.05941.13841.14191.05150.90660.85950.85190.87990.9554
AQI 0.6731.39711.38591.69721.60260.8226.58755.53375.96936.5788
SGI 0.87360.93980.93430.96611.00990.97751.03541.06611.08281.1262
DEPI 1.23041.17151.12051.04420.95850.99021.05631.05251.13991.0921
SGAI 1.2680.98620.92020.89650.8570.90010.87230.83140.86480.9266
LVGI 1.1911.09681.10091.14091.06470.99720.95050.88651.01961.0759
TATA -0.0652-0.085-0.1141-0.1092-0.0892-0.04670.0235-0.0218-0.0444-0.0431
M-score -3.02-2.69-2.97-2.72-2.73-2.940.09-0.78-0.63-0.36
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