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Henry Schein, Inc. (NAS:HSIC)
Beneish M-Score
-2.62 (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.

Henry Schein, Inc. has a M-score of -2.62 suggests that the company is not a manipulator.

HSIC' s 10-Year Beneish M-Score Range
Min: -2.91   Max: -1.71
Current: -2.62

-2.91
-1.71

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 -2.41.


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 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 * 0.9719+0.528 * 1.0096+0.404 * 1.0119+0.892 * 1.0694+0.115 * 0.9914
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9878+4.679 * -0.0418-0.327 * 0.9677
=-2.62

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
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.
Net Income was 124.268 + 107.378 + 108.43 + 91.478 = $432 Mil.
Non Operating Income was 1.466 + 1.263 + -0.034 + -0.37 = $2 Mil.
Cash Flow from Operations was 274.628 + 152.796 + 274.798 + -38.047 = $664 Mil.
Accounts Receivable was $1,015 Mil.
Revenue was 2408.438 + 2231.058 + 2201.452 + 2099.019 = $8,940 Mil.
Gross Profit was 663.495 + 609.044 + 624.395 + 610.579 = $2,508 Mil.
Total Current Assets was $2,704 Mil.
Total Assets was $5,334 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $125 Mil.
Selling, General & Admin. Expense(SGA) was $1,873 Mil.
Total Current Liabilities was $1,473 Mil.
Long-Term Debt was $488 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)
=(1055.216 / 9560.647) / (1015.194 / 8939.967)
=0.11037077 / 0.1135568
=0.9719

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)
=(639.647 / 8939.967) / (699.52 / 9560.647)
=0.28048347 / 0.27780693
=1.0096

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 - (2834.665 + 275.888) / 5624.636) / (1 - (2704.377 + 273.458) / 5333.997)
=0.44697701 / 0.44172541
=1.0119

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
=9560.647 / 8939.967
=1.0694

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))
=(125.322 / (125.322 + 273.458)) / (128.035 / (128.035 + 275.888))
=0.3142635 / 0.31697873
=0.9914

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)
=(1978.96 / 9560.647) / (1873.36 / 8939.967)
=0.20699018 / 0.20954887
=0.9878

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)
=((450.233 + 1550.663) / 5624.636) / ((488.121 + 1472.709) / 5333.997)
=0.35573786 / 0.36760988
=0.9677

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
=(431.554 - 2.325 - 664.175) / 5624.636
=-0.0418

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 -2.62 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.

Henry Schein, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97290.90480.93870.99270.9590.96441.06070.88481.09050.9719
GMI 1.05120.93560.99141.00290.98971.0021.01651.01751.01061.0096
AQI 1.21510.92071.12211.04670.9721.00221.3060.99540.94941.0119
SGI 1.22061.1611.11541.16961.08061.02481.15121.13331.0481.0694
DEPI 0.85450.9391.07330.9740.95921.00310.83520.9330.97570.9914
SGAI 1.04531.04491.0010.97270.99720.98810.98120.98930.97360.9878
LVGI 1.18980.93750.93520.93670.97230.85970.99941.00341.06570.9677
TATA -0.0279-0.0455-0.0258-0.018-0.0388-0.0229-0.0154-0.0399-0.0043-0.0418
M-score -2.41-2.70-2.48-2.38-2.64-2.55-2.24-2.65-2.41-2.62

Henry Schein, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.94520.88480.910.92230.97521.09051.02061.00391.0010.9719
GMI 1.02191.01751.01611.01291.01241.01061.01861.01831.01421.0096
AQI 1.01250.99540.97681.00270.99030.94940.98290.97210.98361.0119
SGI 1.12681.13331.12541.09471.08011.0481.05221.06541.06441.0694
DEPI 0.91910.9330.89230.89750.93250.97570.95710.95830.97650.9914
SGAI 0.99050.98930.98250.98190.97840.97360.97160.97060.97350.9878
LVGI 0.90341.00340.97711.07781.1251.06571.05840.95980.9030.9677
TATA -0.0294-0.0399-0.0184-0.0258-0.0213-0.0043-0.0042-0.0207-0.0323-0.0418
M-score -2.51-2.65-2.54-2.61-2.57-2.41-2.45-2.50-2.54-2.62
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