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LHC Group Inc (NAS:LHCG)
Beneish M-Score
-2.82 (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.

LHC Group Inc has a M-score of -2.61 suggests that the company is not a manipulator.

LHCG' s 10-Year Beneish M-Score Range
Min: -3.43   Max: -1.8
Current: -2.82

-3.43
-1.8

During the past 13 years, the highest Beneish M-Score of LHC Group Inc was -1.80. The lowest was -3.43. And the median was -2.67.


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 LHC Group 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 * 0.9834+0.528 * 1.0248+0.404 * 1.0555+0.892 * 1.1145+0.115 * 0.9798
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9826+4.679 * -0.0347-0.327 * 1.2641
=-2.61

* 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 $97.5 Mil.
Revenue was 193.371 + 187.713 + 188.867 + 163.681 = $733.6 Mil.
Gross Profit was 80.579 + 74.591 + 77.34 + 66.347 = $298.9 Mil.
Total Current Assets was $135.4 Mil.
Total Assets was $491.7 Mil.
Property, Plant and Equipment(Net PPE) was $34.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.6 Mil.
Selling, General & Admin. Expense(SGA) was $233.9 Mil.
Total Current Liabilities was $60.8 Mil.
Long-Term Debt was $60.8 Mil.
Net Income was 5.534 + 6.174 + 6.061 + 4.068 = $21.8 Mil.
Non Operating Income was 0.106 + 0.235 + -0.109 + 0.033 = $0.3 Mil.
Cash Flow from Operations was 5.206 + 9.655 + 17.693 + 6.103 = $38.7 Mil.
Accounts Receivable was $89.0 Mil.
Revenue was 165.28 + 164.748 + 166.302 + 161.953 = $658.3 Mil.
Gross Profit was 70.039 + 66.782 + 69.293 + 68.705 = $274.8 Mil.
Total Current Assets was $129.6 Mil.
Total Assets was $422.2 Mil.
Property, Plant and Equipment(Net PPE) was $31.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.3 Mil.
Selling, General & Admin. Expense(SGA) was $213.6 Mil.
Total Current Liabilities was $59.6 Mil.
Long-Term Debt was $23.0 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)
=(97.498 / 733.632) / (88.964 / 658.283)
=0.13289769 / 0.13514552
=0.9834

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)
=(74.591 / 658.283) / (80.579 / 733.632)
=0.4174785 / 0.40736636
=1.0248

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 - (135.352 + 34.787) / 491.739) / (1 - (129.555 + 31.052) / 422.226)
=0.65400548 / 0.6196184
=1.0555

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
=733.632 / 658.283
=1.1145

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))
=(8.325 / (8.325 + 31.052)) / (9.571 / (9.571 + 34.787))
=0.21141783 / 0.21576717
=0.9798

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)
=(233.945 / 733.632) / (213.633 / 658.283)
=0.31888604 / 0.32453064
=0.9826

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)
=((60.778 + 60.842) / 491.739) / ((22.963 + 59.646) / 422.226)
=0.24732633 / 0.19565114
=1.2641

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
=(21.837 - 0.265 - 38.657) / 491.739
=-0.0347

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.

LHC Group Inc has a M-score of -2.61 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.

LHC Group Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.0441.02391.02650.68430.87710.89871.13490.91531.02640.9834
GMI 1.07780.95860.9980.9511.04411.01761.08751.04181.02121.0248
AQI 1.47631.26091.36131.31941.02811.01450.92821.05441.01311.0555
SGI 1.34111.40371.36381.28371.39051.18721.00361.00581.03251.1145
DEPI 0.97020.85140.88251.04531.00940.84541.03571.00760.98890.9798
SGAI 1.01641.00571.10120.9050.99520.99021.36040.74181.00620.9826
LVGI 0.35240.80390.87461.54970.85910.76141.61770.82881.01321.2641
TATA 0.0263-0.0210.0366-0.1851-0.0164-0.0671-0.0292-0.1228-0.0565-0.0347
M-score -1.57-2.07-1.80-3.44-2.24-2.64-2.73-2.98-2.68-2.61

LHC Group Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.16230.91530.87010.93720.9941.02641.00951.07291.00070.9834
GMI 1.06821.04181.03811.00941.02091.02121.02691.03141.02461.0248
AQI 1.05661.05441.06681.05511.04171.01311.06171.00181.02771.0555
SGI 0.98471.00581.01571.03361.03381.03251.031.05171.07741.1145
DEPI 1.06911.00761.00891.01930.99470.98890.97170.96750.96270.9798
SGAI 1.27460.74190.74860.75020.75271.00621.0191.00761.00460.9826
LVGI 0.75710.82881.08761.22450.98931.01321.39051.37371.40241.2641
TATA -0.086-0.1228-0.0948-0.0905-0.069-0.0565-0.0386-0.0428-0.0645-0.0347
M-score -2.65-2.98-2.97-2.93-2.70-2.68-2.72-2.68-2.82-2.61
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