Switch to:
Geron Corp (NAS:GERN)
Beneish M-Score
24.15 (As of Today)

Warning Sign:

Beneish M-Score 24.15 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Geron Corp has a M-score of 24.15 signals that the company is a manipulator.

GERN' s Beneish M-Score Range Over the Past 10 Years
Min: -6.57   Max: 31.84
Current: 24.15

-6.57
31.84

During the past 13 years, the highest Beneish M-Score of Geron Corp was 31.84. The lowest was -6.57. And the median was -2.29.


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 Geron Corp 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 * 0.0174+0.528 * 1+0.404 * 2.088+0.892 * 30.0847+0.115 * 0.7963
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.0344+4.679 * 0.1578-0.327 * 0.1898
=24.15

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $0.62 Mil.
Revenue was 0.749 + 0.22 + 35.363 + 0.251 = $36.58 Mil.
Gross Profit was 0.749 + 0.22 + 35.363 + 0.251 = $36.58 Mil.
Total Current Assets was $110.96 Mil.
Total Assets was $143.14 Mil.
Property, Plant and Equipment(Net PPE) was $0.21 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.07 Mil.
Selling, General & Admin. Expense(SGA) was $17.99 Mil.
Total Current Liabilities was $6.66 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -8.842 + -8.468 + 27.185 + -9.356 = $0.52 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -5.578 + -5.251 + -4.905 + -6.335 = $-22.07 Mil.
Accounts Receivable was $1.19 Mil.
Revenue was 0.537 + 0.178 + 0.16 + 0.341 = $1.22 Mil.
Gross Profit was 0.537 + 0.178 + 0.16 + 0.341 = $1.22 Mil.
Total Current Assets was $147.90 Mil.
Total Assets was $165.81 Mil.
Property, Plant and Equipment(Net PPE) was $0.17 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.04 Mil.
Selling, General & Admin. Expense(SGA) was $17.36 Mil.
Total Current Liabilities was $40.63 Mil.
Long-Term Debt was $0.00 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)
=(0.624 / 36.583) / (1.19 / 1.216)
=0.0170571 / 0.97861842
=0.0174

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)
=(0.22 / 1.216) / (0.749 / 36.583)
=1 / 1
=1

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 - (110.955 + 0.212) / 143.143) / (1 - (147.897 + 0.171) / 165.807)
=0.22338501 / 0.10698583
=2.088

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
=36.583 / 1.216
=30.0847

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))
=(0.041 / (0.041 + 0.171)) / (0.068 / (0.068 + 0.212))
=0.19339623 / 0.24285714
=0.7963

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)
=(17.986 / 36.583) / (17.364 / 1.216)
=0.49164913 / 14.27960526
=0.0344

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)
=((0 + 6.658) / 143.143) / ((0 + 40.632) / 165.807)
=0.04651293 / 0.245056
=0.1898

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
=(0.519 - 0 - -22.069) / 143.143
=0.1578

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.

Geron Corp has a M-score of 24.15 signals that the company is likely to 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.

Geron Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.04870.26723.04362.42680.66121.13570.48411.58361.90.0397
GMI 1111111111
AQI 0.37341.25463.074215.98180.4671.36490.01980.704837.90042.0006
SGI 11.32.32590.36780.61582.06430.68431.11120.47360.898731.5447
DEPI 1.4761.21440.90341.15490.89920.61161.21730.59243.63561.0033
SGAI 0.09470.72412.77861.43930.60941.92690.77161.61741.19350.0337
LVGI 1.75190.27420.75320.94454.23140.48031.68760.79472.15070.1841
TATA -0.0562-0.1166-0.1113-0.1421-0.278-0.2058-0.1378-0.0205-0.2630.1629
M-score 5.28-2.10-1.083.84-4.36-3.49-4.06-2.7111.8325.48

Geron Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.58363.49664.7192.06441.90.67461.29930.0520.03970.0174
GMI 1111111111
AQI 0.70489.95387.9439.066137.90042.1722.631.86362.00062.088
SGI 0.47360.44680.55450.68690.89871.22580.922230.274231.544730.0847
DEPI 0.59240.63560.897952.48993.63563.69612.79910.07521.00330.7963
SGAI 1.61741.65671.55921.4191.19350.95281.24040.03690.03370.0344
LVGI 0.79470.35440.46720.49252.15078.43318.03880.81150.18410.1898
TATA -0.0205-0.0312-0.0488-0.0716-0.263-0.2885-0.2981-0.06470.16290.1578
M-score -2.712.853.1919.2811.83-5.57-5.1522.9325.4824.15
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK