Switch to:
LHC Group Inc (NAS:LHCG)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

LHCG' s 10-Year Beneish M-Score Range
Min: -3.43   Max: -1.8
Current: -2.6

-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 -2.66.


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 * 1.004+0.528 * 1.0123+0.404 * 0.9523+0.892 * 1.1561+0.115 * 0.9669
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.953+4.679 * -0.0628-0.327 * 0.8671
=-2.60

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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 $238.6 Mil.
Total Current Liabilities was $64.6 Mil.
Long-Term Debt was $47.7 Mil.
Net Income was 6.805 + 5.534 + 6.174 + 6.061 = $24.6 Mil.
Non Operating Income was 0 + 0.106 + 0.235 + -0.109 = $0.2 Mil.
Cash Flow from Operations was 22.604 + 5.206 + 9.655 + 17.693 = $55.2 Mil.
Accounts Receivable was $84.5 Mil.
Revenue was 163.681 + 165.28 + 164.748 + 166.302 = $660.0 Mil.
Gross Profit was 66.347 + 70.039 + 66.782 + 69.293 = $272.5 Mil.
Total Current Assets was $114.8 Mil.
Total Assets was $468.1 Mil.
Property, Plant and Equipment(Net PPE) was $31.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.6 Mil.
Selling, General & Admin. Expense(SGA) was $216.6 Mil.
Total Current Liabilities was $52.5 Mil.
Long-Term Debt was $71.0 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)
=(98.041 / 763.03) / (84.47 / 660.011)
=0.12848905 / 0.12798272
=1.004

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)
=(80.579 / 660.011) / (78.653 / 763.03)
=0.41281282 / 0.40779917
=1.0123

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 - (133.985 + 35.309) / 490.964) / (1 - (114.784 + 31.273) / 468.1)
=0.65518042 / 0.68797906
=0.9523

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
=763.03 / 660.011
=1.1561

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))
=(8.62 / (8.62 + 31.273)) / (10.162 / (10.162 + 35.309))
=0.21607801 / 0.2234831
=0.9669

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)
=(238.631 / 763.03) / (216.589 / 660.011)
=0.31274131 / 0.32815968
=0.953

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)
=((47.719 + 64.55) / 490.964) / ((70.953 + 52.496) / 468.1)
=0.22867053 / 0.26372356
=0.8671

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
=(24.574 - 0.232 - 55.158) / 490.964
=-0.0628

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 -2.60 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.91530.87010.93720.9941.02641.00951.07291.00070.98341.004
GMI 1.04181.03811.00941.02091.02121.02691.03141.02461.02481.0123
AQI 1.05441.06681.05511.04171.01311.06171.00181.02771.05550.9523
SGI 1.00581.01571.03361.03381.03251.031.05171.07741.11451.1561
DEPI 1.00761.00891.01930.99470.98890.97170.96750.96270.97980.9669
SGAI 0.74190.74860.75020.75271.00621.01891.00741.00440.98250.953
LVGI 0.82881.08761.22450.98931.01321.39051.37371.40241.26410.8671
TATA -0.1228-0.0948-0.0905-0.069-0.0565-0.0385-0.0427-0.0644-0.0347-0.0628
M-score -2.98-2.97-2.93-2.70-2.68-2.72-2.68-2.82-2.61-2.60
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK