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DaVita Inc (NYSE:DVA)
Beneish M-Score
-2.82 (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 Inc has a M-score of -2.82 suggests that the company is not a manipulator.

DVA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.51   Max: -0.76
Current: -2.82

-3.51
-0.76

During the past 13 years, the highest Beneish M-Score of DaVita Inc was -0.76. The lowest was -3.51. And the median was -2.57.


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 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 * 1.0423+0.528 * 1.0034+0.404 * 0.9806+0.892 * 1.0794+0.115 * 1.0451
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0369+4.679 * -0.0917-0.327 * 1.0285
=-2.82

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,875 Mil.
Revenue was 3717.651 + 3581.136 + 3533.589 + 3525.665 = $14,358 Mil.
Gross Profit was 1046.626 + 998.803 + 1018.458 + 1024.65 = $4,089 Mil.
Total Current Assets was $4,496 Mil.
Total Assets was $18,692 Mil.
Property, Plant and Equipment(Net PPE) was $2,972 Mil.
Depreciation, Depletion and Amortization(DDA) was $675 Mil.
Selling, General & Admin. Expense(SGA) was $1,532 Mil.
Total Current Liabilities was $2,646 Mil.
Long-Term Debt was $8,957 Mil.
Net Income was 53.382 + 97.434 + -6 + 215.872 = $361 Mil.
Non Operating Income was 3.215 + 2.976 + 4.631 + 2.484 = $13 Mil.
Cash Flow from Operations was 516.637 + 429.002 + 436.673 + 678.996 = $2,061 Mil.
Accounts Receivable was $1,667 Mil.
Revenue was 3434.618 + 3287.965 + 3328.017 + 3251.824 = $13,302 Mil.
Gross Profit was 988.542 + 925.353 + 961.556 + 925.29 = $3,801 Mil.
Total Current Assets was $4,781 Mil.
Total Assets was $18,947 Mil.
Property, Plant and Equipment(Net PPE) was $2,565 Mil.
Depreciation, Depletion and Amortization(DDA) was $615 Mil.
Selling, General & Admin. Expense(SGA) was $1,369 Mil.
Total Current Liabilities was $2,334 Mil.
Long-Term Debt was $9,101 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)
=(1875.403 / 14358.041) / (1666.969 / 13302.424)
=0.13061691 / 0.12531318
=1.0423

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)
=(3800.741 / 13302.424) / (4088.537 / 14358.041)
=0.28571793 / 0.28475591
=1.0034

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 - (4496.217 + 2972.407) / 18691.63) / (1 - (4780.921 + 2564.708) / 18946.818)
=0.6004295 / 0.61230276
=0.9806

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
=14358.041 / 13302.424
=1.0794

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))
=(615.097 / (615.097 + 2564.708)) / (675.128 / (675.128 + 2972.407))
=0.19343859 / 0.18509158
=1.0451

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)
=(1531.633 / 14358.041) / (1368.57 / 13302.424)
=0.10667423 / 0.10288125
=1.0369

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)
=((8957.257 + 2645.662) / 18691.63) / ((9101.052 + 2334.29) / 18946.818)
=0.6207548 / 0.60354947
=1.0285

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
=(360.688 - 13.306 - 2061.308) / 18691.63
=-0.0917

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 Inc has a M-score of -2.82 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 Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.66560.92271.07790.95280.93161.05270.980.72560.94461.0491
GMI 1.03370.96031.03451.00941.0570.92430.98031.0491.05511.0006
AQI 0.98160.95770.97230.97360.96961.09211.20850.95170.97690.9276
SGI 1.64121.07861.07521.07931.01811.08241.21611.4371.08761.0771
DEPI 0.81270.99160.9960.99891.02921.06071.01340.79851.00631.0372
SGAI 1.05641.00420.75280.9691.05661.10631.06870.920.98591.0687
LVGI 0.9230.9210.96320.91551.04920.98631.03010.96020.95081.0443
TATA 0.00520.012-0.0346-0.0328-0.0447-0.0792-0.0348-0.0669-0.0364-0.0674
M-score -2.19-2.44-2.44-2.58-2.74-2.74-2.41-2.65-2.58-2.73

DaVita Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.7770.88460.93310.94460.99930.99251.06831.04911.02611.0423
GMI 1.05391.0411.04451.05511.03691.03441.01391.00061.00111.0034
AQI 0.95670.92940.94320.97690.95540.95660.95560.92760.97810.9806
SGI 1.30671.21261.12091.08761.08881.08341.08351.07711.07931.0794
DEPI 0.86650.93230.99811.00631.01391.01581.01531.03721.05851.0451
SGAI 0.9290.97150.96540.98591.03021.04681.05481.06571.04831.0369
LVGI 0.94650.96630.95970.95080.98480.98371.00291.04431.02471.0285
TATA -0.0593-0.0499-0.0529-0.0304-0.0445-0.038-0.0277-0.0674-0.0574-0.0917
M-score -2.66-2.63-2.66-2.56-2.61-2.59-2.49-2.73-2.67-2.82
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