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Heartland Payment Systems Inc (NYSE:HPY)
Beneish M-Score
-2.46 (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.

Heartland Payment Systems Inc has a M-score of -2.46 suggests that the company is not a manipulator.

HPY' s 10-Year Beneish M-Score Range
Min: -4.07   Max: -0.25
Current: -2.46

-4.07
-0.25

During the past 13 years, the highest Beneish M-Score of Heartland Payment Systems Inc was -0.25. The lowest was -4.07. 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 Heartland Payment Systems 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 * 1.1274+0.528 * 0.9546+0.404 * 1.4973+0.892 * 1.1321+0.115 * 0.7949
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1176+4.679 * -0.0658-0.327 * 1.12
=-2.46

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $271 Mil.
Revenue was 675.692 + 602.459 + 604.613 + 600.626 = $2,483 Mil.
Gross Profit was 95.3 + 87.886 + 86.094 + 79.792 = $349 Mil.
Total Current Assets was $540 Mil.
Total Assets was $1,463 Mil.
Property, Plant and Equipment(Net PPE) was $167 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $218 Mil.
Total Current Liabilities was $555 Mil.
Long-Term Debt was $516 Mil.
Net Income was 20.906 + 17.238 + -19.771 + 20.458 = $39 Mil.
Non Operating Income was -0.326 + 0.026 + -4.313 + 3.581 = $-1 Mil.
Cash Flow from Operations was 56.381 + 20.951 + 41.469 + 17.306 = $136 Mil.
Accounts Receivable was $213 Mil.
Revenue was 582.859 + 523.283 + 530.38 + 557.129 = $2,194 Mil.
Gross Profit was 73.305 + 70.848 + 73.447 + 76.743 = $294 Mil.
Total Current Assets was $456 Mil.
Total Assets was $934 Mil.
Property, Plant and Equipment(Net PPE) was $156 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $172 Mil.
Total Current Liabilities was $410 Mil.
Long-Term Debt was $200 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)
=(271.288 / 2483.39) / (212.559 / 2193.651)
=0.109241 / 0.09689736
=1.1274

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)
=(87.886 / 2193.651) / (95.3 / 2483.39)
=0.1341795 / 0.1405627
=0.9546

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 - (540.212 + 166.645) / 1463.432) / (1 - (455.711 + 155.77) / 933.96)
=0.51698678 / 0.34528138
=1.4973

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
=2483.39 / 2193.651
=1.1321

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))
=(39.975 / (39.975 + 155.77)) / (57.613 / (57.613 + 166.645))
=0.20421978 / 0.25690499
=0.7949

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)
=(217.69 / 2483.39) / (172.057 / 2193.651)
=0.0876584 / 0.07843408
=1.1176

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)
=((515.76 + 554.69) / 1463.432) / ((200 + 409.939) / 933.96)
=0.73146549 / 0.65306758
=1.12

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
=(38.831 - -1.032 - 136.107) / 1463.432
=-0.0658

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.

Heartland Payment Systems Inc has a M-score of -2.46 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.

Heartland Payment Systems Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.05250.86970.95540.9720.99991.0380.93891.01381.04531.0812
GMI 0.9410.99640.94650.94971.00681.1570.77140.84260.88381.0462
AQI 0.86610.98830.97541.52440.80780.94181.13171.06960.98071.4829
SGI 1.38481.31411.19761.17591.06941.12841.07111.00831.06061.0824
DEPI 1.06820.96911.26121.08951.07761.00331.11531.06471.90950.8126
SGAI 0.86560.9631.0031.10271.30850.88561.17251.06171.16951.0143
LVGI 0.57520.77271.14711.28041.26340.89950.9191.21170.93231.2105
TATA 0.23210.1313-0.1001-0.09750.02790.076-0.1016-0.1284-0.0369-0.0423
M-score -0.92-1.63-2.87-2.72-2.49-1.86-3.01-3.19-2.53-2.40

Heartland Payment Systems Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.20591.26721.00191.04530.84370.84591.05751.08121.07071.1274
GMI 0.84560.85770.9170.88380.94321.00971.02591.04621.00920.9546
AQI 1.06590.97011.06320.98070.99991.06961.46761.48291.57321.4973
SGI 1.02221.04011.05051.06061.05541.05861.06771.08241.10811.1321
DEPI 1.19851.35031.53361.90951.61811.37811.17270.81260.82270.7949
SGAI 1.11991.15171.11831.16951.06730.99211.00361.01431.07011.1176
LVGI 1.23651.20331.19330.93230.9650.9891.17211.21051.1571.12
TATA -0.0848-0.0921-0.0981-0.0369-0.0579-0.0485-0.0067-0.0423-0.0428-0.0658
M-score -2.80-2.77-2.93-2.53-2.80-2.71-2.23-2.40-2.37-2.46
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