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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.
During the past 13 years, the highest Beneish M-Score of Myriad Genetics Inc was 3.89. The lowest was -4.50. And the median was -2.44.
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 Myriad Genetics 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 * 1.1275||+||0.528 * 1.0798||+||0.404 * 0.9568||+||0.892 * 0.9292||+||0.115 * 1.0515|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2042||+||4.679 * -0.0791||-||0.327 * 0.9164|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $85.8 Mil.|
Revenue was 189.884 + 179.985 + 184.393 + 168.837 = $723.1 Mil.
Gross Profit was 151.495 + 143.692 + 146.541 + 133.972 = $575.7 Mil.
Total Current Assets was $283.6 Mil.
Total Assets was $766.2 Mil.
Property, Plant and Equipment(Net PPE) was $67.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.0 Mil.
Selling, General & Admin. Expense(SGA) was $366.0 Mil.
Total Current Liabilities was $68.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 18.712 + 21.475 + 24.031 + 15.982 = $80.2 Mil.
Non Operating Income was -0.817 + -0.298 + 1.513 + -0.098 = $0.3 Mil.
Cash Flow from Operations was 51.044 + 29.878 + 52.597 + 6.981 = $140.5 Mil.
|Accounts Receivable was $81.9 Mil.
Revenue was 188.75 + 182.924 + 204.06 + 202.467 = $778.2 Mil.
Gross Profit was 157.771 + 156.315 + 177.929 + 176.986 = $669.0 Mil.
Total Current Assets was $322.4 Mil.
Total Assets was $823.8 Mil.
Property, Plant and Equipment(Net PPE) was $34.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.8 Mil.
Selling, General & Admin. Expense(SGA) was $327.1 Mil.
Total Current Liabilities was $80.6 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(85.8 / 723.099)||/||(81.9 / 778.201)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(143.692 / 778.201)||/||(151.495 / 723.099)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (283.6 + 67.2) / 766.2)||/||(1 - (322.4 + 34.6) / 823.8)|
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.
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))|
|=||(13.8 / (13.8 + 34.6))||/||(25 / (25 + 67.2))|
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)|
|=||(365.999 / 723.099)||/||(327.098 / 778.201)|
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)|
|=||((0 + 68.7) / 766.2)||/||((0 + 80.6) / 823.8)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(80.2 - 0.3||-||140.5)||/||766.2|
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.
Myriad Genetics Inc has a M-score of -2.77 suggests that the company will not be a manipulator.
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
Myriad Genetics Inc Annual Data
Myriad Genetics Inc Quarterly Data