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

Warning Sign:

Beneish M-Score 22.93 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 22.93 signals that the company is a manipulator.

GERN' s Beneish M-Score Range Over the Past 10 Years
Min: -6.57   Max: 31.91
Current: 22.93

-6.57
31.91

During the past 13 years, the highest Beneish M-Score of Geron Corp was 31.91. The lowest was -6.57. And the median was -2.38.


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 * 0.052+0.528 * 1+0.404 * 1.8636+0.892 * 30.2742+0.115 * 0.0752
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.0369+4.679 * -0.0647-0.327 * 0.8115
=22.93

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1.24 Mil.
Revenue was 35.363 + 0.251 + 0.537 + 0.178 = $36.33 Mil.
Gross Profit was 35.363 + 0.251 + 0.537 + 0.178 = $36.33 Mil.
Total Current Assets was $122.02 Mil.
Total Assets was $154.02 Mil.
Property, Plant and Equipment(Net PPE) was $0.18 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.05 Mil.
Selling, General & Admin. Expense(SGA) was $17.75 Mil.
Total Current Liabilities was $6.13 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 27.185 + -9.356 + -9.315 + -8.947 = $-0.43 Mil.
Non Operating Income was 0 + 0 + 0.016 + -0.015 = $0.00 Mil.
Cash Flow from Operations was -4.905 + -6.335 + -7.705 + 28.477 = $9.53 Mil.
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.



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)
=(1.238 / 36.329) / (0.787 / 1.2)
=0.03407746 / 0.65583333
=0.052

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)
=(0.251 / 1.2) / (35.363 / 36.329)
=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 - (122.015 + 0.183) / 154.019) / (1 - (128.192 + 0.063) / 144.247)
=0.20660438 / 0.11086539
=1.8636

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
=36.329 / 1.2
=30.2742

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))
=(0.001 / (0.001 + 0.063)) / (0.048 / (0.048 + 0.183))
=0.015625 / 0.20779221
=0.0752

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)
=(17.749 / 36.329) / (15.901 / 1.2)
=0.48856286 / 13.25083333
=0.0369

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 + 6.125) / 154.019) / ((0 + 7.069) / 144.247)
=0.03976782 / 0.04900622
=0.8115

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
=(-0.433 - 0.001 - 9.532) / 154.019
=-0.0647

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 22.93 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.43390.85691.58363.49664.7192.06441.90.67461.29930.052
GMI 1111111111
AQI 0.17320.04810.70489.95387.9439.066137.90042.1722.631.8636
SGI 1.18710.76930.47360.44680.55450.68690.89871.22580.922230.2742
DEPI 0.93870.50210.59240.63560.897952.48993.63563.69612.79910.0752
SGAI 0.73580.99731.61741.65671.55921.4191.19350.95281.24040.0369
LVGI 0.71730.98150.79470.35440.46720.49252.15078.43318.03880.8115
TATA -0.0502-0.0652-0.0205-0.0312-0.0488-0.0716-0.263-0.2885-0.2981-0.0647
M-score -3.27-3.56-2.712.853.1919.2811.83-5.57-5.1522.93
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