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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 -1.38. The lowest was -2.99. And the median was -2.52.
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 * 1.0428||+||0.528 * 1.0059||+||0.404 * 0.9669||+||0.892 * 1.0675||+||0.115 * 0.9737|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9894||+||4.679 * -0.0136||-||0.327 * 1.0799|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $1,296 Mil.|
Revenue was 2872.63 + 2712.956 + 2850.918 + 2685.835 = $11,122 Mil.
Gross Profit was 803.316 + 779.305 + 799.278 + 748.908 = $3,131 Mil.
Total Current Assets was $3,278 Mil.
Total Assets was $6,634 Mil.
Property, Plant and Equipment(Net PPE) was $320 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $2,339 Mil.
Total Current Liabilities was $1,911 Mil.
Long-Term Debt was $700 Mil.
Net Income was 120.097 + 113.752 + 129.948 + 127.735 = $492 Mil.
Non Operating Income was 0.268 + 3.137 + 0.193 + -0.277 = $3 Mil.
Cash Flow from Operations was 274.384 + -101.512 + 298.311 + 107.428 = $579 Mil.
|Accounts Receivable was $1,164 Mil.
Revenue was 2629.32 + 2463.646 + 2702.096 + 2623.729 = $10,419 Mil.
Gross Profit was 750.678 + 713.395 + 764.464 + 721.666 = $2,950 Mil.
Total Current Assets was $2,905 Mil.
Total Assets was $6,106 Mil.
Property, Plant and Equipment(Net PPE) was $310 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $2,215 Mil.
Total Current Liabilities was $1,637 Mil.
Long-Term Debt was $589 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)|
|=||(1296.225 / 11122.339)||/||(1164.38 / 10418.791)|
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)|
|=||(2950.203 / 10418.791)||/||(3130.807 / 11122.339)|
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 - (3277.591 + 320.098) / 6633.596)||/||(1 - (2905.337 + 310.333) / 6105.626)|
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))|
|=||(154.924 / (154.924 + 310.333))||/||(166.35 / (166.35 + 320.098))|
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)|
|=||(2339.073 / 11122.339)||/||(2214.692 / 10418.791)|
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)|
|=||((700.052 + 1910.912) / 6633.596)||/||((588.523 + 1636.742) / 6105.626)|
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|
|=||(491.532 - 3.321||-||578.611)||/||6633.596|
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 -2.48 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