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LHC Group Inc (NAS:LHCG)
Beneish M-Score
-2.71 (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 -2.71 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: -2.71

-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 -2.67.


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 * 0.9593+0.528 * 0.9912+0.404 * 0.8728+0.892 * 1.1208+0.115 * 0.9364
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9494+4.679 * -0.0474-0.327 * 1.0645
=-2.71

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $107.1 Mil.
Revenue was 204.122 + 200.172 + 193.079 + 193.371 = $790.7 Mil.
Gross Profit was 83.249 + 83.533 + 78.653 + 80.579 = $326.0 Mil.
Total Current Assets was $205.9 Mil.
Total Assets was $568.9 Mil.
Property, Plant and Equipment(Net PPE) was $38.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.4 Mil.
Selling, General & Admin. Expense(SGA) was $241.9 Mil.
Total Current Liabilities was $72.2 Mil.
Long-Term Debt was $92.6 Mil.
Net Income was 8.845 + 8.95 + 6.805 + 5.534 = $30.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0.265 = $0.3 Mil.
Cash Flow from Operations was 3.668 + 25.347 + 22.604 + 5.206 = $56.8 Mil.
Accounts Receivable was $99.7 Mil.
Revenue was 187.713 + 188.867 + 163.681 + 165.28 = $705.5 Mil.
Gross Profit was 74.591 + 77.34 + 66.347 + 70.039 = $288.3 Mil.
Total Current Assets was $137.7 Mil.
Total Assets was $495.6 Mil.
Property, Plant and Equipment(Net PPE) was $33.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.2 Mil.
Selling, General & Admin. Expense(SGA) was $227.3 Mil.
Total Current Liabilities was $70.1 Mil.
Long-Term Debt was $64.8 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)
=(107.139 / 790.744) / (99.652 / 705.541)
=0.13549139 / 0.14124197
=0.9593

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)
=(83.533 / 705.541) / (83.249 / 790.744)
=0.4086467 / 0.41228767
=0.9912

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 - (205.932 + 38.255) / 568.887) / (1 - (137.713 + 33.798) / 495.631)
=0.57076361 / 0.65395425
=0.8728

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
=790.744 / 705.541
=1.1208

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))
=(9.241 / (9.241 + 33.798)) / (11.382 / (11.382 + 38.255))
=0.21471224 / 0.22930475
=0.9364

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)
=(241.862 / 790.744) / (227.305 / 705.541)
=0.30586637 / 0.32217121
=0.9494

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)
=((92.608 + 72.247) / 568.887) / ((64.818 + 70.102) / 495.631)
=0.28978514 / 0.27221865
=1.0645

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
=(30.134 - 0.265 - 56.825) / 568.887
=-0.0474

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 -2.71 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.93720.9941.02641.00951.07291.00070.98341.0040.89210.9593
GMI 1.00941.02091.02121.02691.03141.02461.02481.01231.00270.9912
AQI 1.05511.04171.01311.06171.00181.02771.05550.95230.99210.8728
SGI 1.03361.03381.03251.031.05171.07741.11451.15611.13441.1208
DEPI 1.01930.99470.98890.97170.96750.96270.97980.96690.88840.9364
SGAI 0.75020.75271.00621.01891.00791.00390.98260.95310.94960.9494
LVGI 1.22450.98931.01321.39051.37371.40241.26410.86710.79121.0645
TATA -0.0905-0.069-0.0565-0.0385-0.043-0.0641-0.0347-0.0628-0.07-0.0474
M-score -2.93-2.70-2.68-2.72-2.68-2.82-2.61-2.60-2.72-2.71
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