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LHC Group Inc (NAS:LHCG)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

LHCG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.43   Max: -1.6
Current: -2.57

-3.43
-1.6

During the past 13 years, the highest Beneish M-Score of LHC Group Inc was -1.60. The lowest was -3.43. And the median was -2.66.


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 * 1.0835+0.528 * 1.0033+0.404 * 1.0461+0.892 * 1.1085+0.115 * 0.9238
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.966+4.679 * -0.0373-0.327 * 1.3279
=-2.57

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $117.8 Mil.
Revenue was 222.552 + 218.993 + 204.122 + 200.172 = $845.8 Mil.
Gross Profit was 86.951 + 90.053 + 83.249 + 83.533 = $343.8 Mil.
Total Current Assets was $145.2 Mil.
Total Assets was $582.9 Mil.
Property, Plant and Equipment(Net PPE) was $38.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.2 Mil.
Selling, General & Admin. Expense(SGA) was $255.6 Mil.
Total Current Liabilities was $80.5 Mil.
Long-Term Debt was $96.5 Mil.
Net Income was 7.686 + 7.735 + 8.845 + 8.95 = $33.2 Mil.
Non Operating Income was 0 + 0.457 + 0 + 0 = $0.5 Mil.
Cash Flow from Operations was 17.161 + 8.315 + 3.668 + 25.347 = $54.5 Mil.
Accounts Receivable was $98.0 Mil.
Revenue was 193.079 + 193.371 + 187.713 + 188.867 = $763.0 Mil.
Gross Profit was 78.653 + 80.579 + 74.591 + 77.34 = $311.2 Mil.
Total Current Assets was $134.0 Mil.
Total Assets was $491.0 Mil.
Property, Plant and Equipment(Net PPE) was $35.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.2 Mil.
Selling, General & Admin. Expense(SGA) was $238.7 Mil.
Total Current Liabilities was $64.6 Mil.
Long-Term Debt was $47.7 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)
=(117.761 / 845.839) / (98.041 / 763.03)
=0.13922389 / 0.12848905
=1.0835

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)
=(311.163 / 763.03) / (343.786 / 845.839)
=0.40779917 / 0.40644378
=1.0033

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 - (145.184 + 38.191) / 582.853) / (1 - (133.985 + 35.309) / 490.964)
=0.68538379 / 0.65518042
=1.0461

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
=845.839 / 763.03
=1.1085

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))
=(10.162 / (10.162 + 35.309)) / (12.187 / (12.187 + 38.191))
=0.2234831 / 0.24191115
=0.9238

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)
=(255.571 / 845.839) / (238.664 / 763.03)
=0.30215088 / 0.31278456
=0.966

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)
=((96.485 + 80.499) / 582.853) / ((47.719 + 64.55) / 490.964)
=0.30365118 / 0.22867053
=1.3279

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
=(33.216 - 0.457 - 54.491) / 582.853
=-0.0373

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 -2.57 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.08531.0110.68310.87870.89251.14270.91531.02640.98341.0171
GMI 0.93231.00330.95231.04281.02321.08161.04181.02121.02480.9913
AQI 1.26091.36131.31941.02811.01450.92821.05441.01311.05551.0511
SGI 1.32421.38461.28611.38791.19370.99821.00581.03251.11451.1128
DEPI 0.85140.88251.04531.00940.84541.03571.00760.98890.97980.9033
SGAI 0.99951.08440.99140.90850.98481.36790.74181.00850.98030.9551
LVGI 0.80390.87461.54970.85910.76141.61770.82881.01321.26411.2051
TATA -0.0210.0366-0.23310.0289-0.067-0.0294-0.1228-0.0564-0.0347-0.0496
M-score -2.09-1.79-3.68-2.01-2.64-2.73-2.98-2.68-2.61-2.65

LHC Group Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.02641.00951.07291.00070.98341.0040.89210.95931.01711.0835
GMI 1.02121.02691.03141.02461.02481.01231.00270.99120.99131.0033
AQI 1.01311.06171.00181.02771.05550.95230.99210.87281.05111.0461
SGI 1.03251.031.05171.07741.11451.15611.13441.12081.11281.1085
DEPI 0.98890.97170.96750.96270.97980.96690.88840.93640.90330.9238
SGAI 1.00941.02211.01111.0070.98260.95310.94960.94940.95510.966
LVGI 1.01321.39051.37371.40241.26410.86710.79121.06451.20511.3279
TATA -0.0565-0.0385-0.043-0.0641-0.0347-0.0628-0.07-0.0474-0.0496-0.0373
M-score -2.68-2.72-2.68-2.82-2.61-2.60-2.72-2.71-2.65-2.57
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