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DaVita HealthCare Partners Inc (NYSE:DVA)
Beneish M-Score
-2.64 (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.

DaVita HealthCare Partners Inc has a M-score of -2.64 suggests that the company is not a manipulator.

DVA' s 10-Year Beneish M-Score Range
Min: -3.45   Max: -1.67
Current: -2.64

-3.45
-1.67

During the past 13 years, the highest Beneish M-Score of DaVita HealthCare Partners Inc was -1.67. The lowest was -3.45. And the median was -2.62.


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 DaVita HealthCare Partners Inc 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 * 0.7367+0.528 * 1.0469+0.404 * 0.9517+0.892 * 1.437+0.115 * 0.7985
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9254+4.679 * -0.0669-0.327 * 0.9602
=-2.64

* 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 $1,845 Mil.
Revenue was 3063.209 + 2999.586 + 2871.673 + 2829.582 = $11,764 Mil.
Gross Profit was 935.377 + 904.252 + 857.353 + 875.653 = $3,573 Mil.
Total Current Assets was $3,472 Mil.
Total Assets was $17,099 Mil.
Property, Plant and Equipment(Net PPE) was $2,189 Mil.
Depreciation, Depletion and Amortization(DDA) was $528 Mil.
Selling, General & Admin. Expense(SGA) was $1,183 Mil.
Total Current Liabilities was $2,462 Mil.
Long-Term Debt was $8,141 Mil.
Net Income was 212.278 + 136.628 + 254.376 + 30.164 = $633 Mil.
Non Operating Income was 3.45 + 2.113 + -1.374 + 0.598 = $5 Mil.
Cash Flow from Operations was 354.187 + 733.128 + 306.819 + 379.207 = $1,773 Mil.
Accounts Receivable was $1,742 Mil.
Revenue was 2477.853 + 1945.888 + 1913.006 + 1849.533 = $8,186 Mil.
Gross Profit was 770.394 + 618.515 + 613.684 + 600.138 = $2,603 Mil.
Total Current Assets was $2,887 Mil.
Total Assets was $16,015 Mil.
Property, Plant and Equipment(Net PPE) was $1,872 Mil.
Depreciation, Depletion and Amortization(DDA) was $344 Mil.
Selling, General & Admin. Expense(SGA) was $890 Mil.
Total Current Liabilities was $2,016 Mil.
Long-Term Debt was $8,327 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)
=(1844.568 / 11764.05) / (1742.319 / 8186.28)
=0.15679702 / 0.21283403
=0.7367

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)
=(904.252 / 8186.28) / (935.377 / 11764.05)
=0.31793818 / 0.30369091
=1.0469

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 - (3472.278 + 2189.411) / 17098.877) / (1 - (2887.05 + 1872.37) / 16014.633)
=0.66888533 / 0.70280805
=0.9517

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
=11764.05 / 8186.28
=1.437

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))
=(343.908 / (343.908 + 1872.37)) / (528.119 / (528.119 + 2189.411))
=0.15517367 / 0.19433787
=0.7985

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)
=(1183.447 / 11764.05) / (889.879 / 8186.28)
=0.1005986 / 0.10870371
=0.9254

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)
=((8141.231 + 2462.049) / 17098.877) / ((8326.534 + 2016.425) / 16014.633)
=0.62011558 / 0.64584427
=0.9602

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
=(633.446 - 4.787 - 1773.341) / 17098.877
=-0.0669

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.

DaVita HealthCare Partners Inc has a M-score of -2.64 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.

DaVita HealthCare Partners Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.051.53720.67910.96611.11170.94210.99960.97890.97030.7367
GMI 1.01331.0291.03370.96031.03451.00941.0570.92430.98031.049
AQI 0.95541.25910.98160.95770.97230.97360.96961.09211.20850.9517
SGI 1.13451.36591.64121.07861.07521.07931.01811.08241.21611.437
DEPI 1.03041.26250.81270.99160.9960.99891.02921.06071.01340.7985
SGAI 1.05121.06041.05641.00420.75280.9691.05661.10631.06870.92
LVGI 0.92331.15070.9230.9210.96320.91551.04920.98631.03010.9602
TATA -0.0803-0.0418-0.00060.0041-0.0346-0.0328-0.0447-0.0792-0.0348-0.0669
M-score -2.68-1.76-2.20-2.44-2.41-2.59-2.68-2.81-2.42-2.64

DaVita HealthCare Partners Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.01510.97970.96990.9040.90940.97030.93720.89940.79040.7367
GMI 1.05180.92410.88380.87110.89070.98031.02091.05521.06261.0469
AQI 1.03231.09211.09011.09071.10081.20851.1921.1611.07130.9517
SGI 1.00721.08151.12711.15381.16371.21611.30591.39261.49871.437
DEPI 1.06821.06071.05811.06541.02121.01340.93110.85490.79980.7985
SGAI 1.15261.10721.11781.11191.06391.06871.01180.94030.94620.9254
LVGI 1.11840.98630.97720.94970.99521.03011.0481.04410.98320.9602
TATA -0.0786-0.0792-0.0723-0.0718-0.0486-0.0348-0.0435-0.04-0.0614-0.0669
M-score -2.84-2.81-2.76-2.79-2.67-2.42-2.41-2.34-2.46-2.64
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