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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(95.658 / 674.512)||/||(109.45 / 653.74)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(13.369 - -0.047||-||59.572)||/||685.536|
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.
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
Harte-Hanks, Inc. Annual Data
Harte-Hanks, Inc. Quarterly Data