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Harte-Hanks Inc (NYSE:HHS)
Beneish M-Score
-3.54 (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 -3.54 suggests that the company is not a manipulator.

HHS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.74   Max: -0.46
Current: -3.54

-5.74
-0.46

During the past 13 years, the highest Beneish M-Score of Harte-Hanks Inc was -0.46. The lowest was -5.74. And the median was -2.70.


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 * 0.7087+0.528 * 0.9362+0.404 * 0.417+0.892 * 0.975+0.115 * 0.7801
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1362+4.679 * -0.0974-0.327 * 0.9883
=-3.54

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $77.8 Mil.
Revenue was 97.425 + 97.317 + 110.723 + 168.027 = $473.5 Mil.
Gross Profit was 70.15 + 69.89 + 80.588 + 129.599 = $350.2 Mil.
Total Current Assets was $267.9 Mil.
Total Assets was $378.8 Mil.
Property, Plant and Equipment(Net PPE) was $25.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.3 Mil.
Selling, General & Admin. Expense(SGA) was $334.3 Mil.
Total Current Liabilities was $155.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -3.041 + -4.263 + -5.603 + 2.545 = $-10.4 Mil.
Non Operating Income was -0.11 + -0.111 + 0.172 + -2.916 = $-3.0 Mil.
Cash Flow from Operations was 4.74 + 15.389 + 6.398 + 2.956 = $29.5 Mil.
Accounts Receivable was $112.6 Mil.
Revenue was 108.784 + 109.175 + 121.173 + 146.518 = $485.7 Mil.
Gross Profit was 74.669 + 74.087 + 85.214 + 102.343 = $336.3 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 $13.1 Mil.
Selling, General & Admin. Expense(SGA) was $301.8 Mil.
Total Current Liabilities was $174.9 Mil.
Long-Term Debt was $0.0 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)
=(77.779 / 473.492) / (112.562 / 485.65)
=0.16426677 / 0.23177597
=0.7087

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)
=(336.313 / 485.65) / (350.227 / 473.492)
=0.69250077 / 0.73966825
=0.9362

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 - (267.936 + 25.908) / 378.784) / (1 - (160.837 + 34.124) / 421.815)
=0.2242439 / 0.53780449
=0.417

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
=473.492 / 485.65
=0.975

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))
=(13.084 / (13.084 + 34.124)) / (14.277 / (14.277 + 25.908))
=0.27715641 / 0.35528182
=0.7801

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)
=(334.27 / 473.492) / (301.764 / 485.65)
=0.70596758 / 0.62136106
=1.1362

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 + 155.225) / 378.784) / ((0 + 174.898) / 421.815)
=0.4097982 / 0.41463201
=0.9883

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
=(-10.362 - -2.965 - 29.483) / 378.784
=-0.0974

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 -3.54 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 local exchange's currency.

Harte-Hanks Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98351.07130.91331.04081.07771.04761.00161.16591.05420.9257
GMI 1.03980.40111.03460.99181.02021.0130.97580.88821.01830.9829
AQI 1.0051.02031.04391.00291.00130.99340.94450.99761.05470.3074
SGI 1.04380.98160.93110.79441.00040.98870.90240.72890.98940.8946
DEPI 0.96560.91760.90570.98291.13451.06660.92230.8890.96850.8564
SGAI 0.98476.28541.021.03360.97051.02631.02681.16240.99321.065
LVGI 1.4551.18871.0140.86190.91230.91920.99750.96670.89361.4264
TATA -0.035-0.0517-0.057-0.0702-0.0428-0.0193-0.222-0.0673-0.001-0.4618
M-score -2.75-3.96-2.87-2.92-2.55-2.50-3.65-2.97-2.38-5.26

Harte-Hanks Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.15461.14931.23161.12411.00841.20190.90410.92070.75350.7087
GMI 0.89760.93120.95050.97661.01561.01670.97430.96870.95060.9362
AQI 1.02641.04111.05471.13541.12940.85350.30740.86180.31510.417
SGI 0.7570.82360.84690.89150.91220.86830.9160.91620.94890.975
DEPI 0.91470.93160.96850.94930.95561.06880.85640.98380.81640.7801
SGAI 1.1711.12521.06081.0240.99671.0221.0661.09851.13461.1362
LVGI 0.96620.92650.89360.87910.86911.42281.42641.4831.53020.9883
TATA -0.0466-0.0319-0.001-0.0241-0.0279-0.4545-0.4618-0.4673-0.5267-0.0974
M-score -2.84-2.67-2.39-2.50-2.58-4.72-5.26-5.06-5.74-3.54
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