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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-3.05 (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 -3.05 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: -3.05

-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 -2.69.


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 * 0.9083+0.528 * 1.0097+0.404 * 1.3737+0.892 * 1.1248+0.115 * 1.1249
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9387+4.679 * -0.1623-0.327 * 1.0705
=-3.05

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $33.6 Mil.
Revenue was 81.974 + 80.894 + 75.133 + 73.554 = $311.6 Mil.
Gross Profit was 66.753 + 65.094 + 60.864 + 59.836 = $252.5 Mil.
Total Current Assets was $139.0 Mil.
Total Assets was $180.1 Mil.
Property, Plant and Equipment(Net PPE) was $39.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.0 Mil.
Selling, General & Admin. Expense(SGA) was $215.8 Mil.
Total Current Liabilities was $39.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.1 + -6.351 + -2.735 + -11.843 = $-27.0 Mil.
Non Operating Income was 0.526 + 1.42 + -0.291 + -0.158 = $1.5 Mil.
Cash Flow from Operations was 7.194 + -5.349 + -2.186 + 1.036 = $0.7 Mil.
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 $204.4 Mil.
Total Current Liabilities was $39.2 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)
=(33.611 / 311.555) / (32.9 / 276.998)
=0.10788143 / 0.11877342
=0.9083

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)
=(226.723 / 276.998) / (252.547 / 311.555)
=0.81850049 / 0.81060166
=1.0097

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 - (139.017 + 39.052) / 180.089) / (1 - (162.393 + 28.56) / 192.525)
=0.01121668 / 0.00816517
=1.3737

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
=311.555 / 276.998
=1.1248

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))
=(6.782 / (6.782 + 28.56)) / (8.032 / (8.032 + 39.052))
=0.19189633 / 0.17058874
=1.1249

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)
=(215.777 / 311.555) / (204.372 / 276.998)
=0.69258076 / 0.73781038
=0.9387

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 + 39.227) / 180.089) / ((0 + 39.174) / 192.525)
=0.21782008 / 0.20347487
=1.0705

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
=(-27.029 - 1.497 - 0.695) / 180.089
=-0.1623

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 -3.05 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 1.36280.78681.13830.71910.82690.93891.56121.08781.07451.5836
SGAI 0.30540.66180.77070.92780.98431.00910.99261.06861.12121.0096
LVGI 2.34960.64881.23211.03460.91630.93960.90171.02231.22371.1209
TATA -0.1413-0.0976-0.1762-0.1616-0.156-0.1017-0.1148-0.1158-0.1405-0.1136
M-score 0.30-1.67-2.73-2.98-2.45-2.48-2.49-2.65-3.02-3.28

Genomic Health Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.96521.07481.11241.12511.16071.01791.06661.02091.02370.9083
GMI 1.01341.01091.01111.01931.01381.0161.01711.01271.01321.0097
AQI 1.46261.40511.66261.07610.09790.10290.10380.12451.19991.3737
SGI 1.10721.10751.08771.05391.04281.01731.0221.04261.08431.1248
DEPI 1.01550.98880.94121.07451.24321.44691.66771.58361.33081.1249
SGAI 1.08941.08881.10671.13911.11121.09831.06290.99370.97320.9387
LVGI 1.16131.14021.14381.22371.1631.11711.3031.12090.99931.0705
TATA -0.1643-0.1463-0.1381-0.1405-0.1021-0.1046-0.1483-0.1136-0.1213-0.1623
M-score -3.06-2.89-2.74-3.02-3.17-3.30-3.48-3.27-2.82-3.05
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