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GuruFocus has detected 6 Warning Signs with Haemonetics Corp $HAE.
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Haemonetics Corp (NYSE:HAE)
Beneish M-Score
-2.95 (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.

Haemonetics Corp has a M-score of -2.95 suggests that the company is not a manipulator.

HAE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.82   Max: -1.85
Current: -2.95

-3.82
-1.85

During the past 13 years, the highest Beneish M-Score of Haemonetics Corp was -1.85. The lowest was -3.82. And the median was -2.73.


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 Haemonetics Corp 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 * 1.0036+0.528 * 1.1115+0.404 * 0.9652+0.892 * 1.0083+0.115 * 1.009
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9512+4.679 * -0.1221-0.327 * 0.8943
=-2.95

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $150.6 Mil.
Revenue was 227.841 + 220.253 + 209.956 + 242.342 = $900.4 Mil.
Gross Profit was 101.079 + 104.248 + 91.056 + 89.223 = $385.6 Mil.
Total Current Assets was $496.6 Mil.
Total Assets was $1,306.4 Mil.
Property, Plant and Equipment(Net PPE) was $336.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $89.7 Mil.
Selling, General & Admin. Expense(SGA) was $305.9 Mil.
Total Current Liabilities was $216.2 Mil.
Long-Term Debt was $270.0 Mil.
Net Income was 15.393 + 19.825 + -10.346 + -8.735 = $16.1 Mil.
Non Operating Income was 0 + 0 + 0 + -2.718 = $-2.7 Mil.
Cash Flow from Operations was 55.201 + 39.265 + 30.695 + 53.253 = $178.4 Mil.
Accounts Receivable was $148.8 Mil.
Revenue was 233.384 + 219.693 + 213.413 + 226.478 = $893.0 Mil.
Gross Profit was 108.855 + 105.297 + 102.539 + 108.365 = $425.1 Mil.
Total Current Assets was $501.4 Mil.
Total Assets was $1,336.4 Mil.
Property, Plant and Equipment(Net PPE) was $332.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $89.9 Mil.
Selling, General & Admin. Expense(SGA) was $318.9 Mil.
Total Current Liabilities was $175.3 Mil.
Long-Term Debt was $380.8 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)
=(150.557 / 900.392) / (148.774 / 892.968)
=0.16721273 / 0.16660619
=1.0036

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)
=(425.056 / 892.968) / (385.606 / 900.392)
=0.47600362 / 0.42826458
=1.1115

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 - (496.562 + 335.957) / 1306.421) / (1 - (501.363 + 332.772) / 1336.422)
=0.3627483 / 0.37584461
=0.9652

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
=900.392 / 892.968
=1.0083

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))
=(89.883 / (89.883 + 332.772)) / (89.721 / (89.721 + 335.957))
=0.21266281 / 0.21077199
=1.009

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)
=(305.851 / 900.392) / (318.902 / 892.968)
=0.33968649 / 0.3571259
=0.9512

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)
=((269.997 + 216.221) / 1306.421) / ((380.814 + 175.334) / 1336.422)
=0.37217559 / 0.416147
=0.8943

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
=(16.137 - -2.718 - 178.414) / 1306.421
=-0.1221

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.

Haemonetics Corp has a M-score of -2.95 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 local exchange's currency.

Haemonetics Corp Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.98651.140.8160.9671.02290.99041.02470.91970.91331.0791
GMI 1.03931.0130.96820.98580.99611.03471.05690.96181.04581.0684
AQI 1.43971.59820.91241.4550.94730.88831.70410.98420.99640.9171
SGI 1.07121.14861.15771.07951.04841.07561.22551.05220.970.9983
DEPI 1.07711.10081.00960.9560.92591.00121.16260.87751.09731.0029
SGAI 1.05451.0361.05250.99970.95121.0661.07481.07670.94980.9424
LVGI 0.83551.09980.88751.21290.73731.08492.97160.92290.9961.041
TATA -0.0654-0.0454-0.084-0.0928-0.0516-0.054-0.0317-0.0623-0.0679-0.1273
M-score -2.48-2.21-2.92-2.77-2.59-2.74-2.73-2.83-2.86-3.00

Haemonetics Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.94920.98340.91330.93111.011.07291.07911.06871.02581.0036
GMI 1.01681.05281.04581.02521.00571.00271.06841.09931.10541.1115
AQI 0.96160.97110.99640.99551.01240.92220.91710.89620.86950.9652
SGI 0.98180.97640.970.95320.95310.96540.99831.00681.01631.0083
DEPI 1.05141.09071.09731.05331.0010.99271.00291.00421.02111.009
SGAI 0.99690.9750.95110.99230.95310.94940.94170.94730.95760.9512
LVGI 0.9650.99220.9960.98991.00861.0481.0411.05050.9880.8943
TATA -0.0742-0.062-0.073-0.0704-0.0644-0.1286-0.1325-0.1566-0.1581-0.1221
M-score -2.88-2.77-2.88-2.89-2.80-3.08-3.03-3.14-3.16-2.95
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