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Genomic Health Inc (NAS:GHDX)
Beneish M-Score
-2.82 (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 -2.82 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: -2.82

-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 -2.67.


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 * 1.0237+0.528 * 1.0132+0.404 * 1.1999+0.892 * 1.0843+0.115 * 1.3308
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9807+4.679 * -0.1213-0.327 * 0.9993
=-2.82

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $38.8 Mil.
Revenue was 80.894 + 75.133 + 73.554 + 70.619 = $300.2 Mil.
Gross Profit was 65.094 + 60.864 + 59.836 + 57.586 = $243.4 Mil.
Total Current Assets was $136.6 Mil.
Total Assets was $177.7 Mil.
Property, Plant and Equipment(Net PPE) was $39.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.5 Mil.
Selling, General & Admin. Expense(SGA) was $215.3 Mil.
Total Current Liabilities was $37.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.351 + -2.735 + -11.843 + -9.237 = $-30.2 Mil.
Non Operating Income was 1.42 + -0.291 + -0.158 + 0.325 = $1.3 Mil.
Cash Flow from Operations was -5.349 + -2.186 + 1.036 + -3.404 = $-9.9 Mil.
Accounts Receivable was $35.0 Mil.
Revenue was 68.152 + 69.126 + 69.101 + 70.477 = $276.9 Mil.
Gross Profit was 55.39 + 56.625 + 57.122 + 58.27 = $227.4 Mil.
Total Current Assets was $175.0 Mil.
Total Assets was $202.0 Mil.
Property, Plant and Equipment(Net PPE) was $25.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.8 Mil.
Selling, General & Admin. Expense(SGA) was $202.5 Mil.
Total Current Liabilities was $42.6 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)
=(38.829 / 300.2) / (34.979 / 276.856)
=0.12934377 / 0.12634366
=1.0237

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)
=(227.407 / 276.856) / (243.38 / 300.2)
=0.8213909 / 0.81072618
=1.0132

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 - (136.557 + 39.311) / 177.721) / (1 - (175.044 + 25.171) / 201.97)
=0.01042645 / 0.00868941
=1.1999

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
=300.2 / 276.856
=1.0843

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))
=(6.841 / (6.841 + 25.171)) / (7.52 / (7.52 + 39.311))
=0.21370111 / 0.1605774
=1.3308

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)
=(215.294 / 300.2) / (202.45 / 276.856)
=0.71716855 / 0.73124657
=0.9807

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 + 37.436) / 177.721) / ((0 + 42.575) / 201.97)
=0.21064477 / 0.21079863
=0.9993

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
=(-30.166 - 1.296 - -9.903) / 177.721
=-0.1213

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 -2.82 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

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.18960.96521.07481.11241.12511.16071.01791.06661.02091.0237
GMI 1.00421.01341.01091.01111.01931.01381.0161.01711.01271.0132
AQI 1.26761.46261.40511.66261.07610.09790.10290.10380.12451.1999
SGI 1.11231.10721.10751.08771.05391.04281.01731.0221.04261.0843
DEPI 1.08781.01550.98880.94121.07451.24321.44691.66771.58361.3308
SGAI 1.06861.08941.08881.10671.13911.11121.10721.07141.00160.9807
LVGI 1.02231.16131.14021.14381.22371.1631.11711.3031.12090.9993
TATA -0.1158-0.1643-0.1463-0.1381-0.1405-0.1021-0.1046-0.1483-0.1136-0.1213
M-score -2.65-3.06-2.89-2.74-3.02-3.17-3.30-3.48-3.27-2.82
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