Switch to:
GuruFocus has detected 4 Warning Signs with LHC Group Inc $LHCG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
LHC Group Inc (NAS:LHCG)
Beneish M-Score
-2.53 (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 -2.53 suggests that the company is not a manipulator.

LHCG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.43   Max: -1.8
Current: -2.53

-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 -2.64.


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 * 1.0093+0.528 * 1.0526+0.404 * 0.9975+0.892 * 1.1206+0.115 * 1.0884
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9737+4.679 * -0.0511-0.327 * 0.918
=-2.53

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $124.8 Mil.
Revenue was 235.443 + 230.797 + 226.031 + 222.552 = $914.8 Mil.
Gross Profit was 91.354 + 89.965 + 88.903 + 86.951 = $357.2 Mil.
Total Current Assets was $149.7 Mil.
Total Assets was $614.1 Mil.
Property, Plant and Equipment(Net PPE) was $43.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.2 Mil.
Selling, General & Admin. Expense(SGA) was $270.8 Mil.
Total Current Liabilities was $80.5 Mil.
Long-Term Debt was $87.5 Mil.
Net Income was 9.817 + 9.616 + 9.464 + 7.686 = $36.6 Mil.
Non Operating Income was 0.492 + 0 + 0 + 0 = $0.5 Mil.
Cash Flow from Operations was 9.629 + 26.971 + 13.711 + 17.161 = $67.5 Mil.
Accounts Receivable was $110.4 Mil.
Revenue was 218.993 + 204.122 + 200.172 + 193.079 = $816.4 Mil.
Gross Profit was 90.053 + 83.249 + 83.533 + 78.653 = $335.5 Mil.
Total Current Assets was $138.8 Mil.
Total Assets was $566.1 Mil.
Property, Plant and Equipment(Net PPE) was $38.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.0 Mil.
Selling, General & Admin. Expense(SGA) was $248.2 Mil.
Total Current Liabilities was $70.2 Mil.
Long-Term Debt was $98.5 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)
=(124.803 / 914.823) / (110.35 / 816.366)
=0.13642311 / 0.13517221
=1.0093

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)
=(335.488 / 816.366) / (357.173 / 914.823)
=0.41095293 / 0.39042853
=1.0526

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 - (149.741 + 43.251) / 614.071) / (1 - (138.83 + 38.096) / 566.054)
=0.68571712 / 0.68743971
=0.9975

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
=914.823 / 816.366
=1.1206

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))
=(11.955 / (11.955 + 38.096)) / (12.16 / (12.16 + 43.251))
=0.23885637 / 0.21945101
=1.0884

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)
=(270.826 / 914.823) / (248.203 / 816.366)
=0.29604197 / 0.30403397
=0.9737

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)
=((87.544 + 80.467) / 614.071) / ((98.543 + 70.166) / 566.054)
=0.27360191 / 0.298044
=0.918

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
=(36.583 - 0.492 - 67.472) / 614.071
=-0.0511

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 -2.53 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 local exchange's currency.

LHC Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.02650.68430.87710.89741.13650.91531.02640.98341.01711.0093
GMI 0.9980.9511.04411.01761.08751.04181.02121.02480.99131.0526
AQI 1.36131.31941.02811.01450.92821.05441.01311.05551.05110.9975
SGI 1.36381.28371.39051.18721.00361.00581.03251.11451.11281.1206
DEPI 0.88251.04531.00940.84541.03571.00760.98890.97980.90331.0884
SGAI 1.10120.9050.99520.99021.36040.73951.00940.98240.95250.9741
LVGI 0.87461.54970.85910.76141.61770.82881.01321.26411.20510.918
TATA 0.0366-0.1851-0.0164-0.0671-0.0294-0.1228-0.0565-0.0347-0.0496-0.0511
M-score -1.80-3.44-2.24-2.64-2.73-2.98-2.68-2.61-2.65-2.53

LHC Group Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.00070.98341.0040.89210.95931.01711.08351.07920.98171.0093
GMI 1.02461.02481.01231.00270.99120.99131.00331.02321.04081.0526
AQI 1.02771.05550.95230.99210.87281.05111.04611.02381.17030.9975
SGI 1.07741.11451.15611.13441.12081.11281.10851.12571.13611.1206
DEPI 0.96270.97980.96690.88840.93640.90330.92381.15141.05241.0884
SGAI 1.0070.98240.9530.94890.94770.95360.96460.97750.98320.9737
LVGI 1.40241.26410.86710.79121.06451.20511.32791.41521.00920.918
TATA -0.0641-0.0347-0.0628-0.07-0.0474-0.0496-0.0373-0.0155-0.0523-0.0511
M-score -2.82-2.61-2.60-2.72-2.71-2.65-2.57-2.46-2.52-2.53
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)
FEEDBACK