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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

GHDX' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 4.53
Current: -2.89

-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 -2.66.


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 * 1.0748+0.528 * 1.0109+0.404 * 1.4051+0.892 * 1.1075+0.115 * 0.9888
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.068+4.679 * -0.1463-0.327 * 1.1402
=-2.89

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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 $179.4 Mil.
Total Current Liabilities was $32.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -4.618 + -7.445 + -9.369 + 0.488 = $-20.9 Mil.
Non Operating Income was 0.034 + -0.226 + -0.799 + 0.089 = $-0.9 Mil.
Cash Flow from Operations was 1.974 + 0.126 + -4.197 + 8.082 = $6.0 Mil.
Accounts Receivable was $26.7 Mil.
Revenue was 63.691 + 63.094 + 60.427 + 58.648 = $245.9 Mil.
Gross Profit was 52.934 + 53.348 + 50.786 + 49.611 = $206.7 Mil.
Total Current Assets was $142.7 Mil.
Total Assets was $167.7 Mil.
Property, Plant and Equipment(Net PPE) was $15.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.9 Mil.
Selling, General & Admin. Expense(SGA) was $151.7 Mil.
Total Current Liabilities was $26.8 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)
=(31.771 / 272.288) / (26.69 / 245.86)
=0.1166816 / 0.10855772
=1.0748

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)
=(54.947 / 245.86) / (58.27 / 272.288)
=0.84063695 / 0.83158274
=1.0109

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 - (146.488 + 17.342) / 177.95) / (1 - (142.721 + 15.468) / 167.657)
=0.07934813 / 0.05647244
=1.4051

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
=272.288 / 245.86
=1.1075

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))
=(5.854 / (5.854 + 15.468)) / (6.666 / (6.666 + 17.342))
=0.27455211 / 0.27765745
=0.9888

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)
=(179.421 / 272.288) / (151.694 / 245.86)
=0.65893833 / 0.61699341
=1.068

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 + 32.414) / 177.95) / ((0 + 26.784) / 167.657)
=0.18215229 / 0.15975474
=1.1402

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
=(-20.944 - -0.902 - 5.985) / 177.95
=-0.1463

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 -2.89 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 1.83012.34960.64881.23210.91081.11450.92780.85281.0223
TATA -0.0496-0.1411-0.0976-0.1762-0.1616-0.156-0.1017-0.1148-0.1158
M-score 21.880.30-1.67-2.73-2.94-2.52-2.47-2.48-2.64

Genomic Health Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.11380.98140.77070.92531.16241.10841.15731.18960.96521.0748
GMI 0.96760.97380.97180.9920.99691.00231.01121.00421.01341.0109
AQI 0.26140.19420.37661.92171.52521.44481.40951.26761.46261.4051
SGI 1.15051.14151.14171.1411.11651.10971.10981.11231.10721.1075
DEPI 1.01491.14061.32551.56121.49321.39351.28561.08781.01550.9888
SGAI 1.01611.02421.01780.99261.0011.01691.03061.05481.07171.068
LVGI 0.780.84960.79980.90171.04871.12781.17531.02231.16131.1402
TATA -0.1-0.1182-0.1312-0.1148-0.0991-0.1215-0.1153-0.1158-0.1643-0.1463
M-score -2.95-3.20-3.35-2.49-2.44-2.67-2.64-2.64-3.05-2.89
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