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H&R Block Inc (NYSE:HRB)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

HRB' s 10-Year Beneish M-Score Range
Min: -3.23   Max: -0.92
Current: -2.74

-3.23
-0.92

During the past 13 years, the highest Beneish M-Score of H&R Block Inc was -0.92. The lowest was -3.23. And the median was -2.74.


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 * 0.8611+0.528 * 1.0206+0.404 * 1.0216+0.892 * 1.018+0.115 * 0.5118
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9735+4.679 * -0.0324-0.327 * 0.8789
=-2.74

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $168 Mil.
Revenue was 2301.37 + 509.074 + 134.628 + 133.586 = $3,079 Mil.
Gross Profit was 1484.981 + 114.396 + -87.069 + -77.935 = $1,434 Mil.
Total Current Assets was $2,951 Mil.
Total Assets was $4,515 Mil.
Property, Plant and Equipment(Net PPE) was $311 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $606 Mil.
Total Current Liabilities was $1,878 Mil.
Long-Term Debt was $505 Mil.
Net Income was 738.841 + -36.948 + -111.998 + -116.232 = $474 Mil.
Non Operating Income was 3.014 + -6.666 + -2.282 + -0.681 = $-7 Mil.
Cash Flow from Operations was 1873.808 + -619.623 + -245.992 + -381.585 = $627 Mil.
Accounts Receivable was $192 Mil.
Revenue was 2562.99 + 199.77 + 134.34 + 127.195 = $3,024 Mil.
Gross Profit was 1743.591 + -149.895 + -72.723 + -82.858 = $1,438 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 $22 Mil.
Selling, General & Admin. Expense(SGA) was $611 Mil.
Total Current Liabilities was $2,313 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)
=(167.964 / 3078.658) / (191.618 / 3024.295)
=0.05455754 / 0.06335956
=0.8611

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)
=(114.396 / 3024.295) / (1484.981 / 3078.658)
=0.47552074 / 0.46590852
=1.0206

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 - (2951.301 + 311.387) / 4515.42) / (1 - (3114.006 + 304.911) / 4693.529)
=0.27743421 / 0.27156794
=1.0216

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
=3078.658 / 3024.295
=1.018

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))
=(22.345 / (22.345 + 304.911)) / (47.943 / (47.943 + 311.387))
=0.06827988 / 0.13342332
=0.5118

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)
=(605.559 / 3078.658) / (611.083 / 3024.295)
=0.19669577 / 0.202058
=0.9735

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)
=((505.298 + 1878.289) / 4515.42) / ((505.837 + 2313.116) / 4693.529)
=0.52787714 / 0.60060415
=0.8789

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
=(473.663 - -6.615 - 626.608) / 4515.42
=-0.0324

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 -2.74 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 1.02591.04480.7830.89020.9770.79160.91470.8611
GMI 0.93270.9461.02380.94160.94060.95260.79541.0206
AQI 0.87481.09710.98690.68180.70110.78840.61151.0216
SGI 1.01631.01240.98341.04071.0321.03311.2551.018
DEPI 00000.1870.29670.40460.5118
SGAI 0.9891.01411.05540.99980.97380.96980.83470.9735
LVGI 0.94320.86080.96470.93390.89870.8160.93320.8789
TATA -0.0326-0.0431-0.1277-0.0721-0.0722-0.0686-0.0104-0.0324
M-score -2.77-2.69-3.40-3.13-3.02-3.09-2.66-2.74
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