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H&R Block Inc (NYSE:HRB)
Beneish M-Score
-3.14 (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.

H&R Block Inc has a M-score of -3.14 suggests that the company is not a manipulator.

HRB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.97   Max: 1.53
Current: -3.14

-3.97
1.53

During the past 13 years, the highest Beneish M-Score of H&R Block Inc was 1.53. The lowest was -3.97. And the median was -2.72.


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 H&R Block 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 * 0.8668+0.528 * 1.0271+0.404 * 1.2975+0.892 * 1.015+0.115 * 0.5901
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0382+4.679 * -0.0819-0.327 * 1.7659
=-3.14

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $95 Mil.
Revenue was 128.415 + 137.718 + 2301.37 + 509.074 = $3,077 Mil.
Gross Profit was -97.986 + -75.79 + 1484.981 + 114.396 = $1,426 Mil.
Total Current Assets was $727 Mil.
Total Assets was $2,290 Mil.
Property, Plant and Equipment(Net PPE) was $299 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General & Admin. Expense(SGA) was $637 Mil.
Total Current Liabilities was $567 Mil.
Long-Term Debt was $1,502 Mil.
Net Income was -145.007 + -99.659 + 738.841 + -36.948 = $457 Mil.
Non Operating Income was 1.527 + -4.552 + 3.014 + -6.666 = $-7 Mil.
Cash Flow from Operations was -224.467 + -378.246 + 1873.808 + -619.623 = $651 Mil.
Accounts Receivable was $108 Mil.
Revenue was 134.628 + 133.586 + 2562.99 + 199.77 = $3,031 Mil.
Gross Profit was -87.069 + -64.14 + 1743.591 + -149.895 = $1,442 Mil.
Total Current Assets was $1,457 Mil.
Total Assets was $3,091 Mil.
Property, Plant and Equipment(Net PPE) was $318 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $605 Mil.
Total Current Liabilities was $1,076 Mil.
Long-Term Debt was $506 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)
=(94.76 / 3076.577) / (107.705 / 3030.974)
=0.03080046 / 0.03553478
=0.8668

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)
=(-75.79 / 3030.974) / (-97.986 / 3076.577)
=0.47591533 / 0.46337244
=1.0271

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 - (726.708 + 298.602) / 2289.897) / (1 - (1457.381 + 318.225) / 3091.29)
=0.55224624 / 0.42561002
=1.2975

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
=3076.577 / 3030.974
=1.015

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))
=(32.619 / (32.619 + 318.225)) / (55.843 / (55.843 + 298.602))
=0.09297295 / 0.15755054
=0.5901

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)
=(637.119 / 3076.577) / (604.599 / 3030.974)
=0.20708697 / 0.1994735
=1.0382

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)
=((1501.938 + 566.548) / 2289.897) / ((505.588 + 1075.677) / 3091.29)
=0.90330962 / 0.5115227
=1.7659

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
=(457.227 - -6.677 - 651.472) / 2289.897
=-0.0819

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.

H&R Block Inc has a M-score of -3.14 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.

H&R Block Inc Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 1.42660.88430.54380.96060.67141.1350.71.06250.89020.8611
GMI 0.97431.06241.0261.00671.00340.91510.96290.920.93271.0206
AQI 1.23610.83031.18760.960.94761.08720.8820.97080.68181.0216
SGI 1.15431.12491.01630.99930.94880.76010.98261.00421.04071.018
DEPI 1.0361.06221.14740.98420.93550.94740.94271.17270.9330.8106
SGAI 1.11450.85030.91010.82261.02641.10241.18930.94580.99980.9735
LVGI 0.96951.37650.96820.88770.98780.97021.00721.01860.93390.8789
TATA -0.02110.017-0.1054-0.1006-0.0225-0.0226-0.0228-0.0151-0.0721-0.0324
M-score -1.97-2.52-3.25-2.93-2.96-2.70-2.99-2.52-3.03-2.70

H&R Block Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.02591.04480.7830.89020.9770.79160.91470.86110.82940.8668
GMI 0.93270.9461.02380.94160.93170.94350.7891.01091.03161.0271
AQI 0.87481.09710.98690.68180.70110.78840.61151.02161.02091.2975
SGI 1.01631.01240.98341.04071.0321.03311.2551.0181.01721.015
DEPI 0000.88260.88950.82960.81440.51180.52250.5901
SGAI 0.9891.01411.05540.99980.97380.96980.83470.97350.97481.0382
LVGI 0.94320.86080.96470.93390.89870.8160.93320.87890.82931.7659
TATA -0.0326-0.0431-0.1277-0.0721-0.0722-0.0686-0.0104-0.0324-0.0356-0.0819
M-score -2.77-2.69-3.40-3.03-2.94-3.03-2.62-2.74-2.76-3.14
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