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Geron Corp (NAS:GERN)
Beneish M-Score
26.07 (As of Today)

Warning Sign:

Beneish M-Score 26.07 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 25.82 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: 26.07

-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 -2.25.


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 * 0.012+0.528 * 0.5372+0.404 * 1.5772+0.892 * 32.4538+0.115 * 0.7357
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.0327+4.679 * 0.1645-0.327 * 0.2021
=25.82

* 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 $0.59 Mil.
Revenue was 0.211 + 0.749 + 0.22 + 35.363 = $36.54 Mil.
Gross Profit was 0 + 0 + 0.22 + 35.363 = $35.58 Mil.
Total Current Assets was $111.70 Mil.
Total Assets was $137.42 Mil.
Property, Plant and Equipment(Net PPE) was $0.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.08 Mil.
Selling, General & Admin. Expense(SGA) was $18.56 Mil.
Total Current Liabilities was $7.11 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -8.637 + -8.842 + -8.468 + 27.185 = $1.24 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -5.636 + -5.578 + -5.251 + -4.905 = $-21.37 Mil.
Accounts Receivable was $1.51 Mil.
Revenue was 0.251 + 0.537 + 0.178 + 0.16 = $1.13 Mil.
Gross Profit was 0.251 + 0 + 0.178 + 0.16 = $0.59 Mil.
Total Current Assets was $140.20 Mil.
Total Assets was $159.08 Mil.
Property, Plant and Equipment(Net PPE) was $0.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.04 Mil.
Selling, General & Admin. Expense(SGA) was $17.49 Mil.
Total Current Liabilities was $40.73 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)
=(0.586 / 36.543) / (1.505 / 1.126)
=0.0160359 / 1.3365897
=0.012

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)
=(0.589 / 1.126) / (35.583 / 36.543)
=0.52309059 / 0.97372958
=0.5372

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 - (111.702 + 0.191) / 137.416) / (1 - (140.198 + 0.151) / 159.083)
=0.18573529 / 0.11776243
=1.5772

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
=36.543 / 1.126
=32.4538

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))
=(0.04 / (0.04 + 0.151)) / (0.076 / (0.076 + 0.191))
=0.20942408 / 0.28464419
=0.7357

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)
=(18.556 / 36.543) / (17.488 / 1.126)
=0.50778535 / 15.53108348
=0.0327

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 + 7.111) / 137.416) / ((0 + 40.727) / 159.083)
=0.05174798 / 0.25601101
=0.2021

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
=(1.238 - 0 - -21.37) / 137.416
=0.1645

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 25.82 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 1.03311.21441.02031.02270.89920.61161.21730.59243.63561.0033
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 5.23-2.10-1.073.82-4.36-3.49-4.06-2.7111.8325.48

Geron Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 3.49664.7192.06441.90.67461.29930.0520.03970.01740.012
GMI 11111.79091.91171.0151.0150.57010.5372
AQI 9.95387.9439.066137.90042.1722.631.86362.00062.0881.5772
SGI 0.44680.55450.68690.89871.22580.922230.274231.544730.084732.4538
DEPI 0.63560.897952.48993.63563.69612.79910.07521.00330.79630.7357
SGAI 1.65671.55921.4191.19350.95281.24040.03690.03370.03440.0327
LVGI 0.35440.46720.49252.15078.43318.03880.81150.18410.18980.2021
TATA -0.0312-0.0488-0.0716-0.263-0.2885-0.2981-0.06470.16290.15780.1645
M-score 2.853.1919.2811.83-5.15-4.6722.9425.4923.9225.82
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