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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 -2.82 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 * 1.0007+0.528 * 1.0246+0.404 * 1.0277+0.892 * 1.0774+0.115 * 0.9627
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0068+4.679 * -0.0644-0.327 * 1.4024
=-2.82

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $228.0 Mil.
Total Current Liabilities was $70.1 Mil.
Long-Term Debt was $64.8 Mil.
Net Income was 6.174 + 6.061 + 4.068 + 4.969 = $21.3 Mil.
Non Operating Income was 0.235 + -0.109 + 0.033 + 0.059 = $0.2 Mil.
Cash Flow from Operations was 9.655 + 17.693 + 6.103 + 19.535 = $53.0 Mil.
Accounts Receivable was $92.4 Mil.
Revenue was 164.748 + 166.302 + 161.953 + 161.827 = $654.8 Mil.
Gross Profit was 66.782 + 69.293 + 68.705 + 69.386 = $274.2 Mil.
Total Current Assets was $120.0 Mil.
Total Assets was $414.0 Mil.
Property, Plant and Equipment(Net PPE) was $30.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.0 Mil.
Selling, General & Admin. Expense(SGA) was $210.2 Mil.
Total Current Liabilities was $55.2 Mil.
Long-Term Debt was $25.1 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)
=(99.652 / 705.541) / (92.423 / 654.83)
=0.14124197 / 0.14114045
=1.0007

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)
=(77.34 / 654.83) / (74.591 / 705.541)
=0.41868271 / 0.4086467
=1.0246

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 - (137.713 + 33.798) / 495.631) / (1 - (120.007 + 30.561) / 414.033)
=0.65395425 / 0.63633817
=1.0277

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
=705.541 / 654.83
=1.0774

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))
=(7.963 / (7.963 + 30.561)) / (9.241 / (9.241 + 33.798))
=0.20670232 / 0.21471224
=0.9627

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)
=(227.964 / 705.541) / (210.151 / 654.83)
=0.32310525 / 0.32092451
=1.0068

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)
=((64.818 + 70.102) / 495.631) / ((25.138 + 55.231) / 414.033)
=0.27221865 / 0.19411255
=1.4024

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
=(21.272 - 0.218 - 52.986) / 495.631
=-0.0644

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 -2.82 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.0441.02391.02650.68430.87710.89871.13490.91531.0264
GMI 1.07780.95860.9980.9511.04411.01761.08751.04181.0212
AQI 1.47631.26091.36131.31941.02811.01450.92821.05441.0131
SGI 1.34111.40371.36381.28371.39051.18721.00361.00581.0325
DEPI 0.97020.85140.88251.04531.00940.84541.03571.00760.9889
SGAI 1.01641.00571.10120.9050.99520.99021.36040.74181.0085
LVGI 0.35240.80390.87461.54970.85910.76141.61770.82881.0132
TATA 0.0263-0.0210.0366-0.1851-0.0164-0.0671-0.0292-0.1228-0.0564
M-score -1.57-2.07-1.80-3.44-2.24-2.64-2.73-2.98-2.68

LHC Group Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.1751.16230.91530.87010.93720.9941.02641.00951.07291.0007
GMI 1.09311.06821.04181.03811.00941.02091.02121.02691.03141.0246
AQI 0.98691.05661.05441.06681.05511.04171.01311.06171.00181.0277
SGI 0.95780.98471.00581.01571.03361.03381.03251.031.05171.0774
DEPI 1.03031.06911.00761.00891.01930.99470.98890.97170.96750.9627
SGAI 1.32111.27460.74190.74860.75020.75271.00851.02141.00991.0068
LVGI 1.31320.75710.82881.08761.22450.98931.01321.39051.37371.4024
TATA -0.0552-0.086-0.1228-0.0948-0.0905-0.069-0.0564-0.0385-0.0428-0.0644
M-score -2.73-2.65-2.98-2.97-2.93-2.70-2.68-2.72-2.68-2.82
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