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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-3.28 (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 -3.27 suggests that the company is not a manipulator.

GHDX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -1.67
Current: -3.28

-3.28
-1.67

During the past 13 years, the highest Beneish M-Score of Genomic Health Inc was -1.67. The lowest was -3.28. And the median was -2.65.


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 * 1.0209+0.528 * 1.0127+0.404 * 0.1245+0.892 * 1.0426+0.115 * 1.5836
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0065+4.679 * -0.1136-0.327 * 1.1209
=-3.27

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $37.2 Mil.
Revenue was 75.133 + 73.554 + 70.619 + 68.152 = $287.5 Mil.
Gross Profit was 60.864 + 59.836 + 57.586 + 55.39 = $233.7 Mil.
Total Current Assets was $143.0 Mil.
Total Assets was $184.6 Mil.
Property, Plant and Equipment(Net PPE) was $39.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.1 Mil.
Selling, General & Admin. Expense(SGA) was $210.6 Mil.
Total Current Liabilities was $42.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.735 + -11.843 + -9.237 + -9.493 = $-33.3 Mil.
Non Operating Income was -0.291 + -0.158 + 0.325 + -0.374 = $-0.5 Mil.
Cash Flow from Operations was -2.186 + 1.036 + -3.404 + -7.277 = $-11.8 Mil.
Accounts Receivable was $34.9 Mil.
Revenue was 69.126 + 69.101 + 70.477 + 67.002 = $275.7 Mil.
Gross Profit was 56.625 + 57.122 + 58.27 + 54.947 = $227.0 Mil.
Total Current Assets was $148.5 Mil.
Total Assets was $185.9 Mil.
Property, Plant and Equipment(Net PPE) was $21.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.9 Mil.
Selling, General & Admin. Expense(SGA) was $200.7 Mil.
Total Current Liabilities was $38.3 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)
=(37.164 / 287.458) / (34.916 / 275.706)
=0.12928497 / 0.12664215
=1.0209

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)
=(59.836 / 275.706) / (60.864 / 287.458)
=0.82321023 / 0.81290484
=1.0127

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 - (142.95 + 39.746) / 184.617) / (1 - (148.52 + 21.86) / 185.921)
=0.01040533 / 0.08358927
=0.1245

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
=287.458 / 275.706
=1.0426

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))
=(6.87 / (6.87 + 21.86)) / (7.069 / (7.069 + 39.746))
=0.23912287 / 0.15099861
=1.5836

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)
=(210.576 / 287.458) / (200.666 / 275.706)
=0.73254528 / 0.72782602
=1.0065

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 + 42.672) / 184.617) / ((0 + 38.338) / 185.921)
=0.23113798 / 0.20620586
=1.1209

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
=(-33.308 - -0.498 - -11.831) / 184.617
=-0.1136

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 -3.27 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.05741.24531.0020.93391.081.27310.92531.18961.12511.0209
GMI -0.30480.90550.96710.96410.97110.96370.9921.00421.01931.0127
AQI 1.61880.6930.91531.12542.27951.241.92171.26761.07610.1245
SGI 5.60822.19471.72711.35241.19091.15731.1411.11241.05391.0426
DEPI 1.95130.7751.13830.71910.82690.93891.56121.08781.07451.5836
SGAI 0.30540.66180.77070.92780.98431.00910.99261.05481.11871.0251
LVGI 2.34960.64881.23211.03460.91630.93960.90171.02231.22371.1209
TATA -0.1405-0.0976-0.1762-0.1616-0.156-0.1008-0.1148-0.1158-0.1405-0.1136
M-score 0.37-1.67-2.73-2.98-2.45-2.47-2.49-2.64-3.02-3.28

Genomic Health Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.15731.18960.96521.07481.11241.12511.16071.01791.06661.0209
GMI 1.01121.00421.01341.01091.01111.01931.01381.0161.01711.0127
AQI 1.40951.26761.46261.40511.66261.07610.09790.10290.10380.1245
SGI 1.10981.11231.10721.10751.08771.05391.04281.01731.0221.0426
DEPI 1.28561.08781.01550.98880.94121.07451.24321.44691.66771.5836
SGAI 1.03061.06861.08941.08881.10671.13911.11681.11261.07671.0065
LVGI 1.17531.02231.16131.14021.14381.22371.1631.11711.3031.1209
TATA -0.1153-0.1158-0.1643-0.1463-0.1381-0.1405-0.1021-0.1046-0.1483-0.1136
M-score -2.64-2.65-3.06-2.89-2.74-3.02-3.17-3.30-3.48-3.27
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