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Harte-Hanks Inc (NYSE:HHS)
Beneish M-Score
-5.75 (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 -5.75 suggests that the company is not a manipulator.

HHS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.75   Max: -0.46
Current: -5.75

-5.75
-0.46

During the past 13 years, the highest Beneish M-Score of Harte-Hanks Inc was -0.46. The lowest was -5.75. And the median was -2.69.


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 * 0.7945+0.528 * 0.9683+0.404 * 0.3151+0.892 * 0.8999+0.115 * 0.8164
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1418+4.679 * -0.5289-0.327 * 1.5302
=-5.75

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $75.6 Mil.
Revenue was 97.317 + 110.723 + 129.815 + 121.968 = $459.8 Mil.
Gross Profit was 69.89 + 80.588 + 92.449 + 87.376 = $330.3 Mil.
Total Current Assets was $274.6 Mil.
Total Assets was $386.4 Mil.
Property, Plant and Equipment(Net PPE) was $27.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.3 Mil.
Selling, General & Admin. Expense(SGA) was $318.7 Mil.
Total Current Liabilities was $159.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -4.263 + -5.603 + 2.545 + -170.914 = $-178.2 Mil.
Non Operating Income was -0.111 + 0.172 + -0.471 + 0.575 = $0.2 Mil.
Cash Flow from Operations was 15.389 + 6.398 + 1.698 + 2.483 = $26.0 Mil.
Accounts Receivable was $105.7 Mil.
Revenue was 109.175 + 121.173 + 146.518 + 134.121 = $511.0 Mil.
Gross Profit was 74.087 + 85.214 + 102.343 + 93.771 = $355.4 Mil.
Total Current Assets was $161.4 Mil.
Total Assets was $633.6 Mil.
Property, Plant and Equipment(Net PPE) was $35.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.6 Mil.
Selling, General & Admin. Expense(SGA) was $310.1 Mil.
Total Current Liabilities was $115.3 Mil.
Long-Term Debt was $55.1 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)
=(75.585 / 459.823) / (105.724 / 510.987)
=0.16437847 / 0.20690155
=0.7945

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)
=(355.415 / 510.987) / (330.303 / 459.823)
=0.69554607 / 0.7183264
=0.9683

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 - (274.636 + 27.828) / 386.417) / (1 - (161.412 + 35.373) / 633.612)
=0.21726011 / 0.6894235
=0.3151

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
=459.823 / 510.987
=0.8999

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))
=(13.566 / (13.566 + 35.373)) / (14.306 / (14.306 + 27.828))
=0.27720223 / 0.33953577
=0.8164

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)
=(318.65 / 459.823) / (310.143 / 510.987)
=0.69298404 / 0.6069489
=1.1418

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 + 159.017) / 386.417) / ((55.125 + 115.273) / 633.612)
=0.41151657 / 0.26893114
=1.5302

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
=(-178.235 - 0.165 - 25.968) / 386.417
=-0.5289

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 -5.75 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 0.98351.07130.91331.04081.12991.36550.8750.97641.05421.0274
GMI 1.03980.40111.03460.99181.00250.92360.97760.98951.01830.9829
AQI 1.0051.02031.04391.00291.00131.00451.01960.91391.06510.8767
SGI 1.04380.98160.93110.79440.95420.74850.9460.9630.98940.8946
DEPI 0.96560.91760.90570.98291.20141.25740.69020.95170.96850.9731
SGAI 0.98476.28541.021.03360.97831.10071.04281.05880.99321.065
LVGI 1.4551.18871.0140.86190.91230.91510.95871.01040.89781.415
TATA -0.035-0.0517-0.057-0.0702-0.0433-0.0182-0.2219-0.0673-0.001-0.4615
M-score -2.75-3.96-2.87-2.92-2.55-2.45-3.71-2.91-2.38-4.92

Harte-Hanks Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.9650.89140.95661.05421.03511.00841.17011.05550.96960.7945
GMI 0.96030.99461.00141.01831.0131.01561.00630.9930.98710.9683
AQI 1.01081.02641.04111.06511.13541.12940.85350.87670.86180.3151
SGI 0.9020.98060.98950.98940.96810.91220.89180.87080.87010.8999
DEPI 0.7230.63080.93240.96850.98981.04190.99690.97310.98380.8164
SGAI 1.09381.0631.04540.99320.98680.99671.02161.06851.1031.1418
LVGI 0.98240.96620.92650.89780.87910.86911.42281.4151.4831.5302
TATA -0.0652-0.0492-0.0319-0.001-0.0241-0.0279-0.4536-0.4635-0.4694-0.5289
M-score -2.96-2.86-2.65-2.38-2.49-2.57-4.74-4.92-5.06-5.75
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