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Harte-Hanks, Inc. (NYSE:HHS)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

HHS' s 10-Year Beneish M-Score Range
Min: -3.71   Max: -0.46
Current: -2.9

-3.71
-0.46

During the past 13 years, the highest Beneish M-Score of Harte-Hanks, Inc. was -0.46. The lowest was -3.71. And the median was -2.62.


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 * 0.9702+0.528 * 0.9999+0.404 * 0.9139+0.892 * 0.9692+0.115 * 0.9517
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0417+4.679 * -0.0673-0.327 * 1.0104
=-2.90

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $120.1 Mil.
Revenue was 152.179 + 134.973 + 188.256 + 178.332 = $653.7 Mil.
Gross Profit was 109.45 + 95.658 + 118.159 + 110.745 = $434.0 Mil.
Total Current Assets was $239.3 Mil.
Total Assets was $685.5 Mil.
Property, Plant and Equipment(Net PPE) was $40.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.7 Mil.
Selling, General & Admin. Expense(SGA) was $368.5 Mil.
Total Current Liabilities was $140.8 Mil.
Long-Term Debt was $82.7 Mil.
Net Income was 6.566 + -8.173 + 8.309 + 6.667 = $13.4 Mil.
Non Operating Income was -0.646 + -0.536 + -0.083 + 1.218 = $-0.0 Mil.
Cash Flow from Operations was 24.825 + 3.126 + 16.695 + 14.926 = $59.6 Mil.
Accounts Receivable was $127.8 Mil.
Revenue was 157.848 + 140.993 + 189.629 + 186.042 = $674.5 Mil.
Gross Profit was 109.992 + 98.493 + 120.903 + 118.373 = $447.8 Mil.
Total Current Assets was $205.0 Mil.
Total Assets was $706.2 Mil.
Property, Plant and Equipment(Net PPE) was $44.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.9 Mil.
Selling, General & Admin. Expense(SGA) was $364.9 Mil.
Total Current Liabilities was $129.9 Mil.
Long-Term Debt was $98.0 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)
=(120.122 / 653.74) / (127.752 / 674.512)
=0.18374583 / 0.18939915
=0.9702

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)
=(95.658 / 674.512) / (109.45 / 653.74)
=0.66382955 / 0.66389084
=0.9999

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 - (239.305 + 40.711) / 685.536) / (1 - (205.014 + 44.091) / 706.212)
=0.59153713 / 0.64726598
=0.9139

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
=653.74 / 674.512
=0.9692

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))
=(15.922 / (15.922 + 44.091)) / (15.737 / (15.737 + 40.711))
=0.26530918 / 0.27878756
=0.9517

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)
=(368.459 / 653.74) / (364.933 / 674.512)
=0.56361703 / 0.54103263
=1.0417

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)
=((82.687 + 140.843) / 685.536) / ((98 + 129.905) / 706.212)
=0.32606603 / 0.32271471
=1.0104

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
=(13.369 - -0.047 - 59.572) / 685.536
=-0.0673

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 -2.90 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.0130.99280.98351.07130.91331.04081.12991.03351.15620.9764
GMI 2.4230.9781.03980.40111.03460.99181.00251.00940.89450.9895
AQI 0.95771.04941.0051.02031.04391.00291.00131.00451.01960.9139
SGI 1.09091.10141.04380.98160.93110.79440.95420.98890.7160.963
DEPI 1.16420.92770.96560.91760.90570.98291.20141.02930.84310.9517
SGAI 0.17050.9910.98476.28541.021.03360.97831.02731.11731.0588
LVGI 1.20061.2131.4551.18871.0140.86190.91230.91510.95871.0104
TATA -0.0653-0.0328-0.035-0.0517-0.057-0.0702-0.0433-0.0193-0.2219-0.0673
M-score -1.86-2.62-2.75-3.96-2.87-2.92-2.55-2.52-3.70-2.91

Harte-Hanks, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.0091.03350.96350.94011.11130.9961.13161.18030.86620.9702
GMI 1.00591.00940.99660.98220.95150.94830.960.97430.99980.9999
AQI 1.01091.00451.05570.93380.94381.01960.870.96450.99340.9139
SGI 0.97660.98890.97140.93670.85390.83110.83620.85980.93910.9692
DEPI 1.15011.02931.02420.94071.0740.84311.041.15850.72520.9517
SGAI 1.01341.02731.0291.02931.05241.06331.05961.04111.0251.0417
LVGI 0.88440.91510.79650.99650.98150.95871.18550.97780.95451.0104
TATA -0.0228-0.0193-0.0391-0.2155-0.2125-0.2219-0.2299-0.0652-0.0793-0.0673
M-score -2.54-2.52-2.64-3.65-3.54-3.71-3.72-2.75-3.05-2.90
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