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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.
During the past 13 years, the highest Beneish M-Score of Henry Schein Inc was -1.71. The lowest was -2.91. And the median was -2.43.
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 Henry Schein 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 * 0.985||+||0.528 * 0.9897||+||0.404 * 1.062||+||0.892 * 1.0848||+||0.115 * 0.9656|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.023||+||4.679 * -0.0213||-||0.327 * 1.0637|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,128 Mil.|
Revenue was 2702.096 + 2623.729 + 2615.406 + 2430.159 = $10,371 Mil.
Gross Profit was 764.464 + 721.666 + 728.472 + 696.713 = $2,911 Mil.
Total Current Assets was $2,913 Mil.
Total Assets was $6,139 Mil.
Property, Plant and Equipment(Net PPE) was $311 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $2,196 Mil.
Total Current Liabilities was $1,780 Mil.
Long-Term Debt was $543 Mil.
Net Income was 132.966 + 114.776 + 116.236 + 102.099 = $466 Mil.
Non Operating Income was 0.444 + -0.484 + 1.032 + 3.58 = $5 Mil.
Cash Flow from Operations was 274.019 + 174.502 + 199.232 + -55.249 = $593 Mil.
|Accounts Receivable was $1,055 Mil.
Revenue was 2526.37 + 2348.956 + 2391.81 + 2293.511 = $9,561 Mil.
Gross Profit was 699.52 + 639.647 + 669.856 + 646.991 = $2,656 Mil.
Total Current Assets was $2,835 Mil.
Total Assets was $5,625 Mil.
Property, Plant and Equipment(Net PPE) was $276 Mil.
Depreciation, Depletion and Amortization(DDA) was $128 Mil.
Selling, General & Admin. Expense(SGA) was $1,979 Mil.
Total Current Liabilities was $1,551 Mil.
Long-Term Debt was $450 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1127.517 / 10371.39)||/||(1055.216 / 9560.647)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(721.666 / 9560.647)||/||(764.464 / 10371.39)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2913.166 + 311.496) / 6138.807)||/||(1 - (2834.665 + 275.888) / 5624.636)|
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.
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))|
|=||(128.035 / (128.035 + 275.888))||/||(152.238 / (152.238 + 311.496))|
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)|
|=||(2196.173 / 10371.39)||/||(1978.96 / 9560.647)|
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)|
|=||((542.776 + 1780.111) / 6138.807)||/||((450.233 + 1550.663) / 5624.636)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(466.077 - 4.572||-||592.504)||/||6138.807|
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.
Henry Schein Inc has a M-score of -2.53 suggests that the company will not be a manipulator.
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
Henry Schein Inc Annual Data
Henry Schein Inc Quarterly Data