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

Warning Sign:

Beneish M-Score 11.83 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 11.83 signals that the company is a manipulator.

GERN' s 10-Year Beneish M-Score Range
Min: -4.36   Max: 11.83
Current: 11.83

-4.36
11.83

During the past 13 years, the highest Beneish M-Score of Geron Corp was 11.83. The lowest was -4.36. And the median was -2.74.


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 * 1.9+0.528 * 1+0.404 * 37.9004+0.892 * 0.8987+0.115 * 3.6356
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1935+4.679 * -0.263-0.327 * 2.1507
=11.83

* 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 $0.96 Mil.
Revenue was 0.178 + 0.16 + 0.341 + 0.474 = $1.15 Mil.
Gross Profit was 0.178 + 0.16 + 0.341 + 0.474 = $1.15 Mil.
Total Current Assets was $153.41 Mil.
Total Assets was $172.51 Mil.
Property, Plant and Equipment(Net PPE) was $0.17 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.05 Mil.
Selling, General & Admin. Expense(SGA) was $16.76 Mil.
Total Current Liabilities was $41.80 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -8.947 + -9.549 + -8.734 + -8.44 = $-35.67 Mil.
Non Operating Income was -0.015 + 0.289 + -0.147 + 0.224 = $0.35 Mil.
Cash Flow from Operations was 28.477 + -4.472 + -5.15 + -9.505 = $9.35 Mil.
Accounts Receivable was $0.56 Mil.
Revenue was 0.225 + 0.181 + 0.112 + 0.765 = $1.28 Mil.
Gross Profit was 0.225 + 0.181 + 0.112 + 0.765 = $1.28 Mil.
Total Current Assets was $67.06 Mil.
Total Assets was $67.34 Mil.
Property, Plant and Equipment(Net PPE) was $0.09 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.32 Mil.
Selling, General & Admin. Expense(SGA) was $15.62 Mil.
Total Current Liabilities was $7.59 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)
=(0.963 / 1.153) / (0.564 / 1.283)
=0.83521249 / 0.4395947
=1.9

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)
=(0.16 / 1.283) / (0.178 / 1.153)
=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 - (153.406 + 0.173) / 172.511) / (1 - (67.057 + 0.092) / 67.344)
=0.10974373 / 0.00289558
=37.9004

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
=1.153 / 1.283
=0.8987

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))
=(0.32 / (0.32 + 0.092)) / (0.047 / (0.047 + 0.173))
=0.77669903 / 0.21363636
=3.6356

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)
=(16.758 / 1.153) / (15.624 / 1.283)
=14.53425846 / 12.1777085
=1.1935

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 + 41.799) / 172.511) / ((0 + 7.587) / 67.344)
=0.24229759 / 0.11266037
=2.1507

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
=(-35.67 - 0.351 - 9.35) / 172.511
=-0.263

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 11.83 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.47160.04870.26723.04362.42680.66121.13570.48411.58361.9
GMI 1111111111
AQI 0.36110.37341.25463.074215.98180.4671.36490.01980.704837.9004
SGI 4.027811.32.32590.36780.61582.06430.68431.11120.47360.8987
DEPI 1.76061.03311.21441.02031.02270.89920.61161.21730.59243.6356
SGAI 0.3760.09470.72412.77861.43930.60941.92690.77161.61741.1935
LVGI 1.30131.75190.27420.75320.94454.23140.48031.68760.79472.1507
TATA -0.0933-0.0562-0.1166-0.1113-0.1421-0.278-0.2058-0.1378-0.0205-0.263
M-score -0.865.23-2.10-1.073.82-4.36-3.49-4.06-2.7111.83

Geron Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.77630.48411.04770.43390.85691.58363.49664.7192.06441.9
GMI 1111111111
AQI 0.28610.01980.03970.17320.04810.70489.95387.9439.066137.9004
SGI 0.69131.11121.01511.18710.76930.47360.44680.55450.68690.8987
DEPI 1.02341.21731.25060.93870.50210.59240.63560.897952.48993.6356
SGAI 1.34110.77161.00180.73580.99731.61741.65671.55921.4191.1935
LVGI 1.44731.68761.12670.71730.98150.79470.35440.46720.49252.1507
TATA -0.1547-0.1378-0.0877-0.0502-0.0652-0.0205-0.0312-0.0488-0.0716-0.263
M-score -4.18-4.06-3.23-3.27-3.56-2.712.853.1919.2811.83
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)
Free 7-day Trial
FEEDBACK