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Harte-Hanks Inc (NYSE:HHS)
Beneish M-Score
-5.06 (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.

Harte-Hanks Inc has a M-score of -5.06 suggests that the company is not a manipulator.

HHS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.06   Max: -0.46
Current: -5.06

-5.06
-0.46

During the past 13 years, the highest Beneish M-Score of Harte-Hanks Inc was -0.46. The lowest was -5.06. And the median was -2.68.


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 Harte-Hanks 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 * 0.9433+0.528 * 0.9771+0.404 * 0.8618+0.892 * 0.8944+0.115 * 0.9838
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0984+4.679 * -0.4673-0.327 * 1.483
=-5.06

* 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 $93.1 Mil.
Revenue was 110.723 + 129.815 + 121.968 + 122.345 = $484.9 Mil.
Gross Profit was 80.588 + 92.449 + 87.376 + 86.939 = $347.4 Mil.
Total Current Assets was $125.5 Mil.
Total Assets was $394.4 Mil.
Property, Plant and Equipment(Net PPE) was $35.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.4 Mil.
Selling, General & Admin. Expense(SGA) was $320.0 Mil.
Total Current Liabilities was $86.4 Mil.
Long-Term Debt was $74.7 Mil.
Net Income was -5.603 + 2.545 + -170.914 + -4.172 = $-178.1 Mil.
Non Operating Income was 0.172 + -0.471 + 0.575 + -11.019 = $-10.7 Mil.
Cash Flow from Operations was 6.398 + 1.698 + 2.221 + 6.596 = $16.9 Mil.
Accounts Receivable was $110.4 Mil.
Revenue was 121.173 + 146.518 + 134.121 + 140.31 = $542.1 Mil.
Gross Profit was 85.214 + 102.343 + 93.771 + 98.152 = $379.5 Mil.
Total Current Assets was $168.1 Mil.
Total Assets was $655.1 Mil.
Property, Plant and Equipment(Net PPE) was $36.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.5 Mil.
Selling, General & Admin. Expense(SGA) was $325.8 Mil.
Total Current Liabilities was $120.7 Mil.
Long-Term Debt was $59.7 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)
=(93.142 / 484.851) / (110.408 / 542.122)
=0.19210438 / 0.20365895
=0.9433

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)
=(92.449 / 542.122) / (80.588 / 484.851)
=0.69999004 / 0.71640978
=0.9771

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 - (125.457 + 35.165) / 394.418) / (1 - (168.086 + 36.389) / 655.061)
=0.59276199 / 0.6878535
=0.8618

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
=484.851 / 542.122
=0.8944

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))
=(14.519 / (14.519 + 36.389)) / (14.356 / (14.356 + 35.165))
=0.28520075 / 0.28989722
=0.9838

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)
=(320.017 / 484.851) / (325.763 / 542.122)
=0.66003164 / 0.60090349
=1.0984

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)
=((74.718 + 86.38) / 394.418) / ((59.719 + 120.697) / 655.061)
=0.40844485 / 0.27541863
=1.483

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
=(-178.144 - -10.743 - 16.913) / 394.418
=-0.4673

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.

Harte-Hanks Inc has a M-score of -5.06 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.

Harte-Hanks Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98351.07130.91331.04081.07771.03380.91731.28991.05421.0274
GMI 1.03981.04620.39660.99181.02021.0130.97580.88821.01830.9829
AQI 1.0051.02031.04391.00291.00131.00451.01960.91391.06510.8767
SGI 1.04380.98160.93110.79441.00040.98870.90240.72890.98940.8946
DEPI 0.96560.91760.90570.98291.13451.03560.74371.13540.96850.9731
SGAI 0.98471.01056.34441.03360.97051.02631.02681.16240.99321.065
LVGI 1.4551.18871.0140.86190.91230.91510.95871.01040.89781.415
TATA -0.035-0.0517-0.057-0.0702-0.0428-0.0193-0.222-0.0673-0.001-0.4615
M-score -2.75-2.71-4.12-2.92-2.55-2.51-3.71-2.88-2.38-4.92

Harte-Hanks Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.13330.9650.89140.95661.05421.03510.9831.141.02740.9433
GMI 0.93340.96030.99461.00141.01831.0131.00540.99620.98290.9771
AQI 0.91391.01081.02641.04111.06511.13541.12940.85350.87670.8618
SGI 0.82970.9020.98060.98950.98940.96810.93570.91540.89460.8944
DEPI 0.95170.7230.63080.93240.96850.98980.99450.99690.97310.9838
SGAI 1.11261.09381.0631.04540.99320.98680.99481.0191.0651.0984
LVGI 1.01040.98240.96620.92650.89780.87910.86911.42281.4151.483
TATA -0.0673-0.0652-0.0492-0.0319-0.001-0.0241-0.027-0.4517-0.4615-0.4673
M-score -2.92-2.96-2.86-2.65-2.38-2.49-2.58-4.74-4.92-5.06
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