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Express Scripts Holding Co (NAS:ESRX)
Beneish M-Score
-2.28 (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.

Express Scripts Holding Co has a M-score of -2.28 suggests that the company is not a manipulator.

ESRX' s 10-Year Beneish M-Score Range
Min: -2.93   Max: 2.22
Current: -2.28

-2.93
2.22

During the past 13 years, the highest Beneish M-Score of Express Scripts Holding Co was 2.22. The lowest was -2.93. And the median was -2.49.


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 Express Scripts Holding Co 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 * 1.5338+0.528 * 0.9945+0.404 * 0.9552+0.892 * 0.9691+0.115 * 1.0169
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9737+4.679 * -0.0476-0.327 * 1.0899
=-2.28

* 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 $5,980 Mil.
Revenue was 26312.6 + 25778.5 + 25111 + 23685 = $100,887 Mil.
Gross Profit was 2094 + 2073 + 2007.7 + 1750.4 = $7,925 Mil.
Total Current Assets was $10,568 Mil.
Total Assets was $53,799 Mil.
Property, Plant and Equipment(Net PPE) was $1,584 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,243 Mil.
Selling, General & Admin. Expense(SGA) was $4,323 Mil.
Total Current Liabilities was $17,017 Mil.
Long-Term Debt was $11,013 Mil.
Net Income was 581.8 + 582.3 + 515.2 + 328.3 = $2,008 Mil.
Non Operating Income was 5.1 + 7.2 + 4.7 + 1.7 = $19 Mil.
Cash Flow from Operations was 2924.4 + 435.1 + 735.5 + 454 = $4,549 Mil.
Accounts Receivable was $4,023 Mil.
Revenue was 25781.4 + 25915.6 + 26381.9 + 26019.9 = $104,099 Mil.
Gross Profit was 2061 + 1994.2 + 2115.1 + 1962.1 = $8,132 Mil.
Total Current Assets was $8,491 Mil.
Total Assets was $53,548 Mil.
Property, Plant and Equipment(Net PPE) was $1,659 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,447 Mil.
Selling, General & Admin. Expense(SGA) was $4,581 Mil.
Total Current Liabilities was $13,235 Mil.
Long-Term Debt was $12,363 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)
=(5979.8 / 100887.1) / (4022.9 / 104098.8)
=0.0592722 / 0.03864502
=1.5338

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)
=(2073 / 104098.8) / (2094 / 100887.1)
=0.07812194 / 0.07855415
=0.9945

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 - (10568.1 + 1584) / 53798.9) / (1 - (8491.4 + 1658.9) / 53548.2)
=0.77411992 / 0.81044554
=0.9552

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
=100887.1 / 104098.8
=0.9691

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))
=(2447 / (2447 + 1658.9)) / (2242.9 / (2242.9 + 1584))
=0.59597165 / 0.58608796
=1.0169

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)
=(4322.7 / 100887.1) / (4580.7 / 104098.8)
=0.04284691 / 0.04400339
=0.9737

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)
=((11012.7 + 17016.9) / 53798.9) / ((12363 + 13235.3) / 53548.2)
=0.52100694 / 0.47804221
=1.0899

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
=(2007.6 - 18.7 - 4549) / 53798.9
=-0.0476

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.

Express Scripts Holding Co has a M-score of -2.28 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.

Express Scripts Holding Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.23060.85570.88020.81131.93530.37591.08531.39410.66751.5338
GMI 0.8490.87490.86991.04110.94711.49060.94530.89190.99870.9945
AQI 1.00651.1120.95171.00691.05931.10020.66611.72161.030.9552
SGI 1.0711.08441.0411.20271.12491.81911.02572.03161.11080.9691
DEPI 0.94580.88081.07581.021.29890.59321.04730.70850.89631.0169
SGAI 1.13581.09271.04210.8961.08320.52650.9842.48340.91270.9737
LVGI 1.11791.04831.11240.91510.90360.91141.32260.60070.99081.0899
TATA -0.0711-0.0357-0.0456-0.0589-0.0791-0.0887-0.0588-0.0599-0.055-0.0476
M-score -2.68-2.77-2.89-2.68-1.83-2.38-2.91-1.40-2.93-2.28

Express Scripts Holding Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.86511.39340.93680.45110.66390.66780.96261.20571.31511.5338
GMI 0.92670.89140.89040.91290.94370.99931.00851.02361.0070.9945
AQI 1.22041.72162.24611.01780.99531.031.00150.95250.98240.9552
SGI 1.73212.03272.28241.68271.34631.11020.94530.94330.94960.9691
DEPI 0.89520.70850.65630.51940.73320.89630.99621.00771.02821.0169
SGAI 2.32682.48632.43621.23971.03480.91160.88540.95870.97850.9737
LVGI 0.65170.60070.55160.88530.92540.99081.02811.15891.13491.0899
TATA -0.0261-0.0599-0.0687-0.0462-0.0499-0.055-0.0469-0.0625-0.0497-0.0476
M-score -1.23-1.40-1.41-2.69-2.76-2.93-2.77-2.68-2.51-2.28
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