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H&R Block Inc (NYSE:HRB)
Beneish M-Score
0.00 (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 signals that the company is a manipulator.

HRB' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -0.92
Current: 0

-3.32
-0.92

During the past 13 years, the highest Beneish M-Score of H&R Block Inc was -0.92. The lowest was -3.32. And the median was -2.62.


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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $192 Mil.
Revenue was 2562.99 + 199.77 + 134.34 + 127.195 = $3,024 Mil.
Gross Profit was 1729.788 + -163.767 + -86.524 + -82.858 = $1,397 Mil.
Total Current Assets was $3,114 Mil.
Total Assets was $4,694 Mil.
Property, Plant and Equipment(Net PPE) was $305 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $611 Mil.
Total Current Liabilities was $2,313 Mil.
Long-Term Debt was $506 Mil.
Net Income was 909.998 + -214.711 + -104.943 + -115.187 = $475 Mil.
Non Operating Income was 17.2 + -9.61 + 1.254 + -4.939 = $4 Mil.
Cash Flow from Operations was 1929.903 + -627.949 + -173.631 + -318.742 = $810 Mil.
Accounts Receivable was $ Mil.
Revenue was 0 + 471.979 + 137.263 + 96.489 = $ Mil.
Gross Profit was + + + = $ Mil.
Total Current Assets was $ Mil.
Total Assets was $ Mil.
Property, Plant and Equipment(Net PPE) was $ Mil.
Depreciation, Depletion and Amortization(DDA) was $ Mil.
Selling, General & Admin. Expense(SGA) was $ Mil.
Total Current Liabilities was $ Mil.
Long-Term Debt was $ 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)
=(191.618 / 3024.295) / ( / 705.731)
=0.06335956 /
=

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)
=(-163.767 / 705.731) / (1729.788 / 3024.295)
= / 0.46180647
=

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 - (3114.006 + 304.911) / 4693.529) / (1 - ( + 0) / )
=0.27156794 /
=

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
=3024.295 / 705.731
=

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))
=(0 / (0 + 0)) / (115.604 / (115.604 + 304.911))
= / 0.27491053
=

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)
=(611.083 / 3024.295) / ( / 705.731)
=0.202058 /
=

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)
=((505.837 + 2313.116) / 4693.529) / (( + ) / )
=0.60060415 /
=

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
=(475.157 - 3.905 - 809.581) / 4693.529
=-0.0721

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 signals that the company is likely to 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

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
DSRI 1.34540.83450.88430.54380.96061.06461.25030.40080.8902
GMI 1.17650.97431.06241.0261.00671.00340.91510.96290.9696
AQI 0.97041.23610.83031.18760.960.94761.08720.8820.6818
SGI 0.77081.15431.12491.01630.99930.94880.76010.98261.0407
DEPI 1.50891.0361.06221.14740.98420.93550.94740.94270
SGAI 1.06281.11450.85030.91010.82261.02641.10241.18930.9714
LVGI 1.01650.96951.37650.96820.88770.98780.97021.00720.9339
TATA 0.0147-0.02110.017-0.1054-0.1006-0.0225-0.0226-0.0228-0.0721
M-score -2.17-2.52-2.52-3.25-2.93-2.60-2.59-3.26-3.12

H&R Block Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.87730.42450.36010.99160.99480.1807
GMI 0.98790.89840.92330.91630.94660.8938
AQI 1.12250.8820.98270.96231.13480.5604
SGI 0.86110.92760.98090.98050.92111.1175
DEPI 0.89060.94271.00731.16351.20920.9569
SGAI 1.16231.1871.14081.05911.04120.9713
LVGI 0.96271.00721.09061.03771.00310.7955
TATA -0.0635-0.0228-0.0164-0.00430.1238-0.0721
M-score -3.00-3.32-3.26-2.59-1.93-3.63
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