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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-3.30 (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 -3.30 suggests that the company is not a manipulator.

GHDX' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 4.52
Current: -3.3

-4.24
4.52

During the past 13 years, the highest Beneish M-Score of Genomic Health Inc was 4.52. The lowest was -4.24. And the median was -2.72.


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 * 1.0179+0.528 * 1.016+0.404 * 0.1029+0.892 * 1.0173+0.115 * 1.4469
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0998+4.679 * -0.1046-0.327 * 1.1171
=-3.30

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $32.9 Mil.
Revenue was 70.619 + 68.152 + 69.126 + 69.101 = $277.0 Mil.
Gross Profit was 57.586 + 55.39 + 56.625 + 57.122 = $226.7 Mil.
Total Current Assets was $162.4 Mil.
Total Assets was $192.5 Mil.
Property, Plant and Equipment(Net PPE) was $28.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.8 Mil.
Selling, General & Admin. Expense(SGA) was $202.2 Mil.
Total Current Liabilities was $39.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -9.237 + -9.493 + -6.267 + -6.262 = $-31.3 Mil.
Non Operating Income was 0.325 + -0.374 + -0.227 + -0.345 = $-0.6 Mil.
Cash Flow from Operations was -3.404 + -7.277 + -0.318 + 0.505 = $-10.5 Mil.
Accounts Receivable was $31.8 Mil.
Revenue was 70.477 + 67.002 + 68.819 + 65.99 = $272.3 Mil.
Gross Profit was 58.27 + 54.947 + 58.004 + 55.209 = $226.4 Mil.
Total Current Assets was $146.5 Mil.
Total Assets was $178.0 Mil.
Property, Plant and Equipment(Net PPE) was $17.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.7 Mil.
Selling, General & Admin. Expense(SGA) was $180.8 Mil.
Total Current Liabilities was $32.4 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)
=(32.9 / 276.998) / (31.771 / 272.288)
=0.11877342 / 0.1166816
=1.0179

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)
=(55.39 / 272.288) / (57.586 / 276.998)
=0.83158274 / 0.81850049
=1.016

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 - (162.393 + 28.56) / 192.525) / (1 - (146.488 + 17.342) / 177.95)
=0.00816517 / 0.07934813
=0.1029

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
=276.998 / 272.288
=1.0173

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))
=(6.666 / (6.666 + 17.342)) / (6.782 / (6.782 + 28.56))
=0.27765745 / 0.19189633
=1.4469

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)
=(202.245 / 276.998) / (180.762 / 272.288)
=0.73013163 / 0.66386326
=1.0998

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 + 39.174) / 192.525) / ((0 + 32.414) / 177.95)
=0.20347487 / 0.18215229
=1.1171

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
=(-31.259 - -0.621 - -10.494) / 192.525
=-0.1046

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 -3.30 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.26321.05741.24531.0020.93391.081.27310.92531.18961.1251
GMI 22.8064-0.30480.90550.96710.96410.97110.96370.9921.00421.0193
AQI 2.37151.61880.6930.91531.12542.27951.241.92171.26761.0761
SGI 15.90835.60822.19471.72711.35241.19091.15731.1411.11241.0539
DEPI 1.21651.36280.78681.13830.71910.82690.93891.56121.08781.0745
SGAI 0.10.30540.66180.77070.92780.98431.00910.99261.05481.1187
LVGI 1.83012.34960.64881.23211.03460.91630.93960.90171.02231.2237
TATA -0.0496-0.1411-0.0976-0.1762-0.1616-0.156-0.1008-0.1148-0.1158-0.1405
M-score 21.880.30-1.67-2.73-2.98-2.45-2.47-2.49-2.64-3.02

Genomic Health Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.16241.10841.15731.18960.96521.07481.11241.12511.16071.0179
GMI 0.99691.00231.01121.00421.01341.01091.01111.01931.01381.016
AQI 1.52521.44481.40951.26761.46261.40511.66261.07610.09790.1029
SGI 1.11651.10971.10981.11231.10721.10751.08771.05391.04281.0173
DEPI 1.49321.39351.28561.08781.01550.98880.94121.07451.24321.4469
SGAI 1.0011.01691.03061.05481.0761.0761.0991.12641.10411.0998
LVGI 1.04871.12781.17531.02231.16131.14021.14381.22371.1631.1171
TATA -0.0994-0.122-0.1159-0.1158-0.1643-0.1463-0.1381-0.1405-0.1021-0.1046
M-score -2.44-2.67-2.64-2.64-3.06-2.89-2.74-3.02-3.17-3.30
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