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

Warning Sign:

Beneish M-Score 19.28 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 19.28 signals that the company is a manipulator.

GERN' s 10-Year Beneish M-Score Range
Min: -6.57   Max: 19.28
Current: 19.28

-6.57
19.28

During the past 13 years, the highest Beneish M-Score of Geron Corp was 19.28. The lowest was -6.57. And the median was -2.51.


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 * 2.0644+0.528 * 1+0.404 * 39.0661+0.892 * 0.6869+0.115 * 52.4899
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.419+4.679 * -0.0716-0.327 * 0.4925
=19.28

* 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 $0.79 Mil.
Revenue was 0.16 + 0.341 + 0.474 + 0.225 = $1.20 Mil.
Gross Profit was 0.16 + 0.341 + 0.474 + 0.225 = $1.20 Mil.
Total Current Assets was $128.19 Mil.
Total Assets was $144.25 Mil.
Property, Plant and Equipment(Net PPE) was $0.06 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $15.90 Mil.
Total Current Liabilities was $7.07 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -9.549 + -8.734 + -8.44 + -9.281 = $-36.00 Mil.
Non Operating Income was 0.289 + -0.147 + 0.224 + -0.109 = $0.26 Mil.
Cash Flow from Operations was -4.472 + -5.15 + -9.505 + -6.801 = $-25.93 Mil.
Accounts Receivable was $0.56 Mil.
Revenue was 0.181 + 0.112 + 0.765 + 0.689 = $1.75 Mil.
Gross Profit was 0.181 + 0.112 + 0.765 + 0.689 = $1.75 Mil.
Total Current Assets was $68.40 Mil.
Total Assets was $68.71 Mil.
Property, Plant and Equipment(Net PPE) was $0.12 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.53 Mil.
Selling, General & Admin. Expense(SGA) was $16.31 Mil.
Total Current Liabilities was $6.84 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)
=(0.787 / 1.2) / (0.555 / 1.747)
=0.65583333 / 0.31768746
=2.0644

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)
=(0.341 / 1.747) / (0.16 / 1.2)
=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 - (128.192 + 0.063) / 144.247) / (1 - (68.402 + 0.116) / 68.713)
=0.11086539 / 0.00283789
=39.0661

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
=1.2 / 1.747
=0.6869

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))
=(0.529 / (0.529 + 0.116)) / (0.001 / (0.001 + 0.063))
=0.82015504 / 0.015625
=52.4899

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)
=(15.901 / 1.2) / (16.314 / 1.747)
=13.25083333 / 9.33829422
=1.419

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 + 7.069) / 144.247) / ((0 + 6.837) / 68.713)
=0.04900622 / 0.09950082
=0.4925

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
=(-36.004 - 0.257 - -25.928) / 144.247
=-0.0716

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 19.28 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 10.47160.04870.26723.04362.42680.66121.13570.48411.5836
GMI 1111111111
AQI 0.97010.36110.37341.25463.074215.98180.4671.36490.01980.7048
SGI 04.027811.32.32590.36780.61582.06430.68431.11120.4736
DEPI 1.08971.76061.03311.21441.02031.02270.89920.61161.21730.5924
SGAI 10.3760.09470.72412.77861.43930.60941.92690.77161.6174
LVGI 0.74281.30131.75190.27420.75320.94454.23140.48031.68760.7947
TATA -0.4211-0.0933-0.0562-0.1166-0.1113-0.1421-0.278-0.2058-0.1378-0.0205
M-score -5.26-0.865.23-2.10-1.073.82-4.36-3.49-4.06-2.71

Geron Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.1130.77630.48411.04770.43390.85691.58363.49664.7192.0644
GMI 1111111111
AQI 0.16050.28610.01980.03970.17320.04810.70489.95387.9439.0661
SGI 0.51370.69131.11121.01511.18710.76930.47360.44680.55450.6869
DEPI 0.79881.02341.21731.25060.93870.50210.59240.63560.897952.4899
SGAI 1.63231.34110.77161.00180.73580.99731.61741.65671.55921.419
LVGI 2.05361.44731.68761.12670.71730.98150.79470.35440.46720.4925
TATA -0.1679-0.1547-0.1378-0.0877-0.0502-0.0652-0.0205-0.0312-0.0488-0.0716
M-score -4.41-4.18-4.06-3.23-3.27-3.56-2.712.853.1919.28
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