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Express Scripts (NAS:ESRX)
Beneish M-Score
-2.51 (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 has a M-score of -2.51 suggests that the company is not a manipulator.

ESRX' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 2.37
Current: -2.51

-3.09
2.37

During the past 13 years, the highest Beneish M-Score of Express Scripts was 2.37. The lowest was -3.09. And the median was -2.54.


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 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 * 1.3151+0.528 * 1.007+0.404 * 0.9824+0.892 * 0.9496+0.115 * 1.0282
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9785+4.679 * -0.0497-0.327 * 1.1349
=-2.51

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $6,385 Mil.
Revenue was 25778.5 + 25111 + 23685 + 25781.4 = $100,356 Mil.
Gross Profit was 2073 + 2007.7 + 1750.4 + 2061 = $7,892 Mil.
Total Current Assets was $9,705 Mil.
Total Assets was $53,439 Mil.
Property, Plant and Equipment(Net PPE) was $1,640 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,281 Mil.
Selling, General & Admin. Expense(SGA) was $4,404 Mil.
Total Current Liabilities was $15,923 Mil.
Long-Term Debt was $11,442 Mil.
Net Income was 582.3 + 515.2 + 328.3 + 501.9 = $1,928 Mil.
Non Operating Income was 7.2 + 4.7 + 1.7 + 9.7 = $23 Mil.
Cash Flow from Operations was 435.1 + 735.5 + 454 + 2935.1 = $4,560 Mil.
Accounts Receivable was $5,112 Mil.
Revenue was 25915.6 + 26381.9 + 26019.9 + 27365.1 = $105,683 Mil.
Gross Profit was 1994.2 + 2115.1 + 1962.1 + 2297.7 = $8,369 Mil.
Total Current Assets was $9,224 Mil.
Total Assets was $54,763 Mil.
Property, Plant and Equipment(Net PPE) was $1,629 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,425 Mil.
Selling, General & Admin. Expense(SGA) was $4,739 Mil.
Total Current Liabilities was $11,226 Mil.
Long-Term Debt was $13,482 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)
=(6384.5 / 100355.9) / (5112.4 / 105682.5)
=0.06361858 / 0.04837509
=1.3151

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)
=(2007.7 / 105682.5) / (2073 / 100355.9)
=0.07919097 / 0.07864112
=1.007

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 - (9704.7 + 1639.9) / 53439.2) / (1 - (9224.2 + 1629.2) / 54763)
=0.78771015 / 0.80181144
=0.9824

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
=100355.9 / 105682.5
=0.9496

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))
=(2425.4 / (2425.4 + 1629.2)) / (2281.2 / (2281.2 + 1639.9))
=0.59818478 / 0.58177552
=1.0282

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)
=(4403.7 / 100355.9) / (4739.3 / 105682.5)
=0.04388083 / 0.0448447
=0.9785

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)
=((11442 + 15922.5) / 53439.2) / ((13482 + 11226.2) / 54763)
=0.51206792 / 0.45118419
=1.1349

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
=(1927.7 - 23.3 - 4559.7) / 53439.2
=-0.0497

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 has a M-score of -2.51 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 Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.91961.23060.85570.88020.81131.93530.37591.08531.39410.6675
GMI 1.04270.8490.87490.86991.04110.94711.49060.94530.89190.9987
AQI 1.11911.00651.1120.95171.00691.05931.10020.66611.72161.03
SGI 1.13691.0711.08441.0411.20271.12491.81911.02572.03161.1108
DEPI 0.92920.94580.88081.07581.021.29890.59321.04730.70850.8963
SGAI 0.95171.13581.09271.04210.8961.08320.52650.9842.48340.9127
LVGI 1.01251.11791.04831.11240.91510.90360.91141.32260.60070.9908
TATA -0.0593-0.0711-0.0357-0.0456-0.0589-0.0791-0.0887-0.0588-0.0599-0.055
M-score -2.64-2.68-2.77-2.89-2.68-1.83-2.38-2.91-1.40-2.93

Express Scripts Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 2.19831.86511.39340.93680.45110.66390.66780.96261.20571.3151
GMI 0.93810.92670.89140.89040.91290.94370.99931.00851.02361.007
AQI 1.14651.22041.72162.24611.01780.99531.031.00150.95250.9824
SGI 1.40681.73212.03272.28241.68271.34631.11020.94530.94330.9496
DEPI 1.31530.89520.70850.65630.51940.73320.89630.99621.00771.0282
SGAI 1.96672.32682.48632.43621.23971.03480.91160.88540.95870.9785
LVGI 0.65480.65170.60070.55160.88530.92540.99081.02811.15891.1349
TATA -0.0296-0.0261-0.0599-0.0687-0.0462-0.0499-0.055-0.0469-0.0625-0.0497
M-score -1.14-1.23-1.40-1.41-2.69-2.76-2.93-2.77-2.68-2.51
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