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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-3.05 (As of Today)

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.

Genomic Health Inc has a M-score of -3.05 suggests that the company is not a manipulator.

GHDX' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 4.53
Current: -3.05

-4.24
4.53

During the past 13 years, the highest Beneish M-Score of Genomic Health Inc was 4.53. The lowest was -4.24. And the median was -2.64.


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 Genomic Health Inc 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 * 0.9652+0.528 * 1.0134+0.404 * 1.4626+0.892 * 1.1072+0.115 * 1.0155
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0717+4.679 * -0.1643-0.327 * 1.1613
=-3.05

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $28.9 Mil.
Revenue was 67.002 + 68.819 + 65.99 + 63.691 = $265.5 Mil.
Gross Profit was 54.947 + 58.004 + 55.209 + 52.934 = $221.1 Mil.
Total Current Assets was $139.9 Mil.
Total Assets was $173.3 Mil.
Property, Plant and Equipment(Net PPE) was $18.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.5 Mil.
Selling, General & Admin. Expense(SGA) was $171.9 Mil.
Total Current Liabilities was $31.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -7.445 + -9.369 + 0.488 + -2.994 = $-19.3 Mil.
Non Operating Income was -0.226 + -0.799 + 0.089 + -0.085 = $-1.0 Mil.
Cash Flow from Operations was 0.126 + -4.197 + 8.082 + 6.165 = $10.2 Mil.
Accounts Receivable was $27.0 Mil.
Revenue was 63.094 + 60.427 + 58.648 + 57.631 = $239.8 Mil.
Gross Profit was 53.348 + 50.786 + 49.611 + 48.618 = $202.4 Mil.
Total Current Assets was $132.6 Mil.
Total Assets was $157.0 Mil.
Property, Plant and Equipment(Net PPE) was $14.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.5 Mil.
Selling, General & Admin. Expense(SGA) was $144.9 Mil.
Total Current Liabilities was $24.5 Mil.
Long-Term Debt was $0.0 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)
=(28.901 / 265.502) / (27.045 / 239.8)
=0.10885417 / 0.11278148
=0.9652

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)
=(58.004 / 239.8) / (54.947 / 265.502)
=0.8438824 / 0.83273949
=1.0134

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 - (139.888 + 18.065) / 173.337) / (1 - (132.639 + 14.834) / 157)
=0.08875197 / 0.06068153
=1.4626

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
=265.502 / 239.8
=1.1072

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))
=(5.481 / (5.481 + 14.834)) / (6.536 / (6.536 + 18.065))
=0.26980064 / 0.26568026
=1.0155

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)
=(171.88 / 265.502) / (144.85 / 239.8)
=0.64737742 / 0.60404504
=1.0717

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 + 31.419) / 173.337) / ((0 + 24.506) / 157)
=0.18125963 / 0.15608917
=1.1613

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
=(-19.32 - -1.021 - 10.176) / 173.337
=-0.1643

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.

Genomic Health Inc has a M-score of -3.05 suggests that the company will not 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.

Genomic Health Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.26321.05741.24531.0020.93391.081.27310.92531.1896
GMI 22.8064-0.30480.90550.96710.96410.97110.96370.9921.0042
AQI 2.37151.61880.6930.91531.12542.27951.241.92171.2676
SGI 15.90835.60822.19471.72711.35241.19091.15731.1411.1124
DEPI 1.21651.36280.78681.13830.71910.82690.93891.56121.0878
SGAI 0.10.30540.66180.77070.92780.98431.00910.99261.0548
LVGI 1.83012.34960.64881.23211.04710.90540.93960.90171.0223
TATA -0.0496-0.1411-0.0976-0.1762-0.1616-0.156-0.1017-0.1148-0.1158
M-score 21.880.30-1.67-2.73-2.99-2.45-2.48-2.49-2.64

Genomic Health Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.27311.11380.98140.77070.92531.16241.10841.15731.18960.9652
GMI 0.96370.96760.97380.97180.9920.99691.00231.01121.00421.0134
AQI 1.240.26140.19420.37661.92171.52521.44481.40951.26761.4626
SGI 1.15731.15051.14151.14171.1411.11651.10971.10981.11231.1072
DEPI 0.93891.01491.14061.32551.56121.49321.39351.28561.08781.0155
SGAI 1.00911.01611.02421.01780.99261.0011.01691.03061.05481.0717
LVGI 0.93960.82150.88170.81780.90171.04871.12781.17531.02231.1613
TATA -0.1017-0.1-0.1182-0.1312-0.1148-0.0991-0.1215-0.1153-0.1158-0.1643
M-score -2.48-2.97-3.21-3.35-2.49-2.44-2.67-2.64-2.64-3.05
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