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DaVita HealthCare Partners Inc (NYSE:DVA)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

DVA' s 10-Year Beneish M-Score Range
Min: -3.45   Max: -1.27
Current: -2.58

-3.45
-1.27

During the past 13 years, the highest Beneish M-Score of DaVita HealthCare Partners Inc was -1.27. The lowest was -3.45. And the median was -2.60.


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 * 0.9446+0.528 * 1.0551+0.404 * 0.9663+0.892 * 1.0876+0.115 * 1.0063
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9859+4.679 * -0.0357-0.327 * 0.9412
=-2.58

* 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 $1,526 Mil.
Revenue was 3328.017 + 3251.824 + 3172.489 + 3042.776 = $12,795 Mil.
Gross Profit was 961.556 + 925.29 + 925.951 + 863.004 = $3,676 Mil.
Total Current Assets was $3,877 Mil.
Total Assets was $17,943 Mil.
Property, Plant and Equipment(Net PPE) was $2,469 Mil.
Depreciation, Depletion and Amortization(DDA) was $591 Mil.
Selling, General & Admin. Expense(SGA) was $1,262 Mil.
Total Current Liabilities was $2,089 Mil.
Long-Term Debt was $8,383 Mil.
Net Income was 208.02 + 184.122 + 147.683 + 183.289 = $723 Mil.
Non Operating Income was 0.229 + -1.246 + -95.855 + 1.698 = $-95 Mil.
Cash Flow from Operations was -69.991 + 847.9 + 262.391 + 419.107 = $1,459 Mil.
Accounts Receivable was $1,485 Mil.
Revenue was 3063.209 + 2999.586 + 2871.673 + 2829.582 = $11,764 Mil.
Gross Profit was 935.377 + 904.252 + 857.353 + 868.691 = $3,566 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 $1,176 Mil.
Total Current Liabilities was $2,462 Mil.
Long-Term Debt was $8,141 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)
=(1525.849 / 12795.106) / (1485.163 / 11764.05)
=0.11925255 / 0.12624589
=0.9446

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)
=(925.29 / 11764.05) / (961.556 / 12795.106)
=0.3030991 / 0.28728179
=1.0551

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 - (3876.797 + 2469.099) / 17942.715) / (1 - (3472.278 + 2189.411) / 17098.877)
=0.64632465 / 0.66888533
=0.9663

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
=12795.106 / 11764.05
=1.0876

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))
=(528.119 / (528.119 + 2189.411)) / (590.935 / (590.935 + 2469.099))
=0.19433787 / 0.19311387
=1.0063

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)
=(1261.506 / 12795.106) / (1176.485 / 11764.05)
=0.09859285 / 0.1000068
=0.9859

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)
=((8383.28 + 2088.652) / 17942.715) / ((8141.231 + 2462.049) / 17098.877)
=0.58363141 / 0.62011558
=0.9412

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
=(723.114 - -95.174 - 1459.407) / 17942.715
=-0.0357

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 -2.58 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.35240.66560.92271.07790.95280.93161.05270.980.72560.9446
GMI 1.0291.03370.96031.03451.00941.0570.92430.98031.0491.0551
AQI 1.25910.98160.95770.97230.97360.96961.09211.20850.95170.9663
SGI 1.36591.64121.07861.07521.07931.01811.08241.21611.4371.0876
DEPI 1.26250.81270.99160.9960.99891.02921.06071.01340.79851.0063
SGAI 1.06041.05641.00420.75280.9691.05661.10631.06870.920.9859
LVGI 1.15070.9230.9210.96320.91551.04920.98631.03010.96020.9412
TATA -0.0418-0.00060.0041-0.0346-0.0328-0.0447-0.0792-0.0348-0.0669-0.0357
M-score -1.93-2.21-2.48-2.44-2.58-2.74-2.74-2.41-2.65-2.58

DaVita HealthCare Partners Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.92060.980.91670.83020.75060.72560.7770.88460.93310.9446
GMI 0.89070.98031.02341.05761.06481.0491.05391.0411.04451.0551
AQI 1.10081.20851.1921.1611.07130.95170.95670.92940.94320.9663
SGI 1.16371.21611.30591.39261.49871.4371.30671.21261.12091.0876
DEPI 1.02121.01340.93110.85490.79980.79850.86650.93230.99811.0063
SGAI 1.06391.06871.00460.93390.94040.920.9290.97150.96540.9859
LVGI 0.99521.03011.0481.04410.98320.96020.94650.96630.95970.9412
TATA -0.0486-0.0348-0.0435-0.04-0.0614-0.0669-0.0593-0.0558-0.0588-0.0357
M-score -2.66-2.41-2.42-2.40-2.50-2.65-2.66-2.66-2.69-2.58
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