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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 9.51. 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 * 0.9421||+||0.528 * 1.0146||+||0.404 * 0.9147||+||0.892 * 1.0488||+||0.115 * 0.8369|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9822||+||4.679 * -0.0598||-||0.327 * 0.883|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $91.1 Mil.|
Revenue was 190.5 + 193.3 + 183.5 + 189.9 = $757.2 Mil.
Gross Profit was 150.3 + 152.7 + 147 + 151.5 = $601.5 Mil.
Total Current Assets was $372.4 Mil.
Total Assets was $868.2 Mil.
Property, Plant and Equipment(Net PPE) was $60.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.6 Mil.
Selling, General & Admin. Expense(SGA) was $364.4 Mil.
Total Current Liabilities was $66.1 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 32.6 + 30.3 + 26.6 + 18.7 = $108.2 Mil.
Non Operating Income was 0.2 + -0.3 + 0.1 + -0.8 = $-0.8 Mil.
Cash Flow from Operations was 44.1 + 40.9 + 24.9 + 51 = $160.9 Mil.
|Accounts Receivable was $92.2 Mil.
Revenue was 180 + 184.4 + 168.8 + 188.75 = $722.0 Mil.
Gross Profit was 143.7 + 146.5 + 133.9 + 157.771 = $581.9 Mil.
Total Current Assets was $282.4 Mil.
Total Assets was $779.0 Mil.
Property, Plant and Equipment(Net PPE) was $69.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.9 Mil.
Selling, General & Admin. Expense(SGA) was $353.7 Mil.
Total Current Liabilities was $67.2 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)|
|=||(91.1 / 757.2)||/||(92.195 / 721.95)|
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)|
|=||(581.871 / 721.95)||/||(601.5 / 757.2)|
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 - (372.4 + 60) / 868.2)||/||(1 - (282.424 + 69.099) / 779.049)|
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))|
|=||(23.909 / (23.909 + 69.099))||/||(26.6 / (26.6 + 60))|
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)|
|=||(364.4 / 757.2)||/||(353.748 / 721.95)|
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 + 66.1) / 868.2)||/||((0 + 67.173) / 779.049)|
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|
|=||(108.2 - -0.8||-||160.9)||/||868.2|
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