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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

GHDX' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 4.53
Current: -2.74

-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 -2.67.


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 * 1.1124+0.528 * 1.0111+0.404 * 1.6626+0.892 * 1.0877+0.115 * 0.9412
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0912+4.679 * -0.1381-0.327 * 1.1438
=-2.74

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $31.0 Mil.
Revenue was 69.101 + 70.477 + 67.002 + 68.819 = $275.4 Mil.
Gross Profit was 57.122 + 58.27 + 54.947 + 58.004 = $228.3 Mil.
Total Current Assets was $145.2 Mil.
Total Assets was $179.3 Mil.
Property, Plant and Equipment(Net PPE) was $18.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.8 Mil.
Selling, General & Admin. Expense(SGA) was $187.6 Mil.
Total Current Liabilities was $33.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.262 + -4.618 + -7.445 + -9.369 = $-27.7 Mil.
Non Operating Income was -0.345 + 0.034 + -0.226 + -0.799 = $-1.3 Mil.
Cash Flow from Operations was 0.505 + 1.974 + 0.126 + -4.197 = $-1.6 Mil.
Accounts Receivable was $25.6 Mil.
Revenue was 65.99 + 63.691 + 63.094 + 60.427 = $253.2 Mil.
Gross Profit was 55.209 + 52.934 + 53.348 + 50.786 = $212.3 Mil.
Total Current Assets was $149.0 Mil.
Total Assets was $176.7 Mil.
Property, Plant and Equipment(Net PPE) was $18.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.3 Mil.
Selling, General & Admin. Expense(SGA) was $158.1 Mil.
Total Current Liabilities was $28.9 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)
=(30.967 / 275.399) / (25.594 / 253.202)
=0.11244413 / 0.10108135
=1.1124

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)
=(58.27 / 253.202) / (57.122 / 275.399)
=0.83837016 / 0.82913518
=1.0111

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 - (145.208 + 18.099) / 179.345) / (1 - (148.954 + 18.242) / 176.7)
=0.08942541 / 0.05378608
=1.6626

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
=275.399 / 253.202
=1.0877

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))
=(6.267 / (6.267 + 18.242)) / (6.751 / (6.751 + 18.099))
=0.25570199 / 0.27167002
=0.9412

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)
=(187.616 / 275.399) / (158.081 / 253.202)
=0.68125157 / 0.62432761
=1.0912

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 + 33.587) / 179.345) / ((0 + 28.931) / 176.7)
=0.18727592 / 0.16372949
=1.1438

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
=(-27.694 - -1.336 - -1.592) / 179.345
=-0.1381

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 -2.74 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.98140.77070.92531.16241.10841.15731.18960.96521.07481.1124
GMI 0.97380.97180.9920.99691.00231.01121.00421.01341.01091.0111
AQI 0.19420.37661.92171.52521.44481.40951.26761.46261.40511.6626
SGI 1.14151.14171.1411.11651.10971.10981.11231.10721.10751.0877
DEPI 1.14061.32551.56121.49321.39351.28561.08781.01550.98880.9412
SGAI 1.02421.01780.99261.0011.01691.03061.05481.07171.0681.0912
LVGI 0.88170.81780.90171.04871.12781.17531.02231.16131.14021.1438
TATA -0.1182-0.1312-0.1148-0.0991-0.1215-0.1153-0.1158-0.1643-0.1463-0.1381
M-score -3.21-3.35-2.49-2.44-2.67-2.64-2.64-3.05-2.89-2.74
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