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Harte-Hanks Inc (NYSE:HHS)
Beneish M-Score
-4.74 (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 -4.74 suggests that the company is not a manipulator.

HHS' s Beneish M-Score Range Over the Past 10 Years
Min: -4.74   Max: 1.12
Current: -4.74

-4.74
1.12

During the past 13 years, the highest Beneish M-Score of Harte-Hanks Inc was 1.12. The lowest was -4.74. And the median was -2.66.


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 * 1.14+0.528 * 0.9962+0.404 * 0.8535+0.892 * 0.9154+0.115 * 0.9969
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.019+4.679 * -0.4517-0.327 * 1.4228
=-4.74

* 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 $112.6 Mil.
Revenue was 121.968 + 122.345 + 121.173 + 146.518 = $512.0 Mil.
Gross Profit was 87.376 + 86.939 + 85.214 + 102.343 = $361.9 Mil.
Total Current Assets was $160.8 Mil.
Total Assets was $421.8 Mil.
Property, Plant and Equipment(Net PPE) was $34.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.4 Mil.
Selling, General & Admin. Expense(SGA) was $317.2 Mil.
Total Current Liabilities was $174.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -170.914 + -4.172 + 1.615 + 10.089 = $-163.4 Mil.
Non Operating Income was 0.575 + -11.019 + 0.407 + 0.331 = $-9.7 Mil.
Cash Flow from Operations was 2.221 + 6.596 + 20.428 + 7.596 = $36.8 Mil.
Accounts Receivable was $107.9 Mil.
Revenue was 134.121 + 140.31 + 132.727 + 152.179 = $559.3 Mil.
Gross Profit was 93.771 + 98.152 + 92.451 + 109.45 = $393.8 Mil.
Total Current Assets was $201.2 Mil.
Total Assets was $641.2 Mil.
Property, Plant and Equipment(Net PPE) was $36.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.2 Mil.
Selling, General & Admin. Expense(SGA) was $340.1 Mil.
Total Current Liabilities was $117.9 Mil.
Long-Term Debt was $68.9 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)
=(112.562 / 512.004) / (107.867 / 559.337)
=0.21984594 / 0.19284796
=1.14

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)
=(86.939 / 559.337) / (87.376 / 512.004)
=0.70409074 / 0.70677573
=0.9962

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 - (160.837 + 34.124) / 421.815) / (1 - (201.175 + 36.008) / 641.195)
=0.53780449 / 0.63009225
=0.8535

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
=512.004 / 559.337
=0.9154

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))
=(15.155 / (15.155 + 36.008)) / (14.425 / (14.425 + 34.124))
=0.29621015 / 0.29712249
=0.9969

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)
=(317.219 / 512.004) / (340.078 / 559.337)
=0.61956352 / 0.60800197
=1.019

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 + 174.898) / 421.815) / ((68.906 + 117.947) / 641.195)
=0.41463201 / 0.29141369
=1.4228

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
=(-163.382 - -9.706 - 36.841) / 421.815
=-0.4517

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 -4.74 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99280.98351.07130.91331.04081.12991.03351.15620.97641.0542
GMI 0.9781.03980.40111.03460.99181.00251.00940.89450.98951.0183
AQI 1.04941.0051.02031.04391.00291.00131.00451.01960.91391.0547
SGI 1.10141.04380.98160.93110.79440.95420.98890.7160.9630.9894
DEPI 0.92770.96560.91760.90570.98291.20141.02930.84310.95170.9685
SGAI 0.9910.98476.28541.021.03360.97831.02731.11731.05880.9932
LVGI 1.2131.4551.18871.0140.86190.91230.91510.95871.01040.8936
TATA -0.0328-0.035-0.0517-0.057-0.0702-0.0433-0.0193-0.2219-0.0673-0.001
M-score -2.62-2.75-3.96-2.87-2.92-2.55-2.52-3.70-2.91-2.38

Harte-Hanks Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.37471.01051.13330.9650.89140.95661.05421.03510.9831.14
GMI 0.91150.93450.93340.96030.99461.00141.01831.0131.00540.9962
AQI 0.96450.99340.91391.01081.02641.04111.05471.13541.12940.8535
SGI 0.73820.80510.82970.9020.98060.98950.98940.96810.93570.9154
DEPI 1.28320.72520.95170.7230.63080.93240.96850.98980.99450.9969
SGAI 1.10591.09091.11261.09381.0631.04540.99320.98680.99481.019
LVGI 0.97780.95451.01040.98240.96620.92650.89360.87910.86911.4228
TATA -0.0628-0.0793-0.0673-0.0652-0.0492-0.0319-0.001-0.0241-0.027-0.4517
M-score -2.70-3.08-2.92-2.96-2.86-2.65-2.38-2.49-2.58-4.74
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