Switch to:
Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-3.48 (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 -3.48 suggests that the company is not a manipulator.

GHDX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.62   Max: 4.53
Current: -3.48

-3.62
4.53

During the past 13 years, the highest Beneish M-Score of Genomic Health Inc was 4.53. The lowest was -3.62. 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 * 1.0666+0.528 * 1.0171+0.404 * 0.1038+0.892 * 1.022+0.115 * 1.6677
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0735+4.679 * -0.1483-0.327 * 1.303
=-3.48

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $33.8 Mil.
Revenue was 73.554 + 70.619 + 68.152 + 69.126 = $281.5 Mil.
Gross Profit was 59.836 + 57.586 + 55.39 + 56.625 = $229.4 Mil.
Total Current Assets was $142.0 Mil.
Total Assets was $178.3 Mil.
Property, Plant and Equipment(Net PPE) was $34.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.7 Mil.
Selling, General & Admin. Expense(SGA) was $206.4 Mil.
Total Current Liabilities was $43.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -11.843 + -9.237 + -9.493 + -6.267 = $-36.8 Mil.
Non Operating Income was -0.158 + 0.325 + -0.374 + -0.227 = $-0.4 Mil.
Cash Flow from Operations was 1.036 + -3.404 + -7.277 + -0.318 = $-10.0 Mil.
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 $188.1 Mil.
Total Current Liabilities was $33.6 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)
=(33.754 / 281.451) / (30.967 / 275.399)
=0.11992851 / 0.11244413
=1.0666

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)
=(57.586 / 275.399) / (59.836 / 281.451)
=0.82913518 / 0.81519341
=1.0171

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 - (142.005 + 34.682) / 178.343) / (1 - (145.208 + 18.099) / 179.345)
=0.00928548 / 0.08942541
=0.1038

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
=281.451 / 275.399
=1.022

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))
=(6.751 / (6.751 + 18.099)) / (6.749 / (6.749 + 34.682))
=0.27167002 / 0.16289735
=1.6677

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)
=(206.398 / 281.451) / (188.137 / 275.399)
=0.73333547 / 0.68314337
=1.0735

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 + 43.52) / 178.343) / ((0 + 33.587) / 179.345)
=0.24402416 / 0.18727592
=1.303

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
=(-36.84 - -0.434 - -9.963) / 178.343
=-0.1483

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 -3.48 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 1.05741.24531.0020.93391.081.27310.92531.18961.1251
GMI -0.30480.90550.96710.96410.97110.96370.9921.00421.0193
AQI 1.61880.6930.91531.12542.27951.241.92171.26761.0761
SGI 5.60822.19471.72711.35241.19091.15731.1411.11241.0539
DEPI 1.36280.78681.13830.71910.82690.93891.56121.08781.0745
SGAI 0.30540.66180.77070.92780.98431.00910.99261.05481.1187
LVGI 2.34960.64881.23211.03460.91630.93960.90171.02231.2237
TATA -0.1411-0.0976-0.1762-0.1616-0.156-0.1017-0.1148-0.1158-0.1405
M-score 0.30-1.67-2.73-2.98-2.45-2.48-2.49-2.64-3.02

Genomic Health Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.15731.18960.96521.07481.11241.12511.16071.01791.06661.0057
GMI 1.01121.00421.01341.01091.01111.01931.01381.0161.01711.0124
AQI 1.40951.26761.46261.40511.66261.07610.09790.10290.10380.1249
SGI 1.10981.11231.10721.10751.08771.05391.04281.01731.0221.0403
DEPI 1.28561.08781.01550.98880.94121.07451.24321.44691.66772.1115
SGAI 1.03061.05481.0761.0761.09421.13681.11421.10971.07351.001
LVGI 1.17531.02231.16131.14021.14381.22371.1631.11711.3031.1198
TATA -0.1153-0.1158-0.1643-0.1463-0.1381-0.1405-0.1021-0.1046-0.1483-0.1283
M-score -2.64-2.64-3.06-2.89-2.74-3.02-3.17-3.30-3.48-3.30
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK