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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 * 1.0254||+||0.528 * 1.006||+||0.404 * 1.0635||+||0.892 * 1.0423||+||0.115 * 0.8632|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9413||+||4.679 * -0.048||-||0.327 * 0.9158|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $91.7 Mil.|
Revenue was 186.4 + 190.5 + 193.3 + 183.5 = $753.7 Mil.
Gross Profit was 146.4 + 150.3 + 152.7 + 147 = $596.4 Mil.
Total Current Assets was $314.5 Mil.
Total Assets was $880.5 Mil.
Property, Plant and Equipment(Net PPE) was $58.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.7 Mil.
Selling, General & Admin. Expense(SGA) was $359.1 Mil.
Total Current Liabilities was $72.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 35.7 + 32.6 + 30.3 + 26.6 = $125.2 Mil.
Non Operating Income was 1.2 + 0.2 + -0.3 + 0.1 = $1.2 Mil.
Cash Flow from Operations was 56.4 + 44.1 + 40.9 + 24.9 = $166.3 Mil.
|Accounts Receivable was $85.8 Mil.
Revenue was 189.9 + 180 + 184.4 + 168.8 = $723.1 Mil.
Gross Profit was 151.5 + 143.7 + 146.5 + 133.9 = $575.6 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.
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)|
|=||(91.7 / 753.7)||/||(85.8 / 723.1)|
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)|
|=||(575.6 / 723.1)||/||(596.4 / 753.7)|
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 - (314.5 + 58.3) / 880.5)||/||(1 - (283.6 + 67.2) / 766.2)|
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))|
|=||(25 / (25 + 67.2))||/||(26.7 / (26.7 + 58.3))|
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)|
|=||(359.1 / 753.7)||/||(366 / 723.1)|
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 + 72.3) / 880.5)||/||((0 + 68.7) / 766.2)|
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|
|=||(125.2 - 1.2||-||166.3)||/||880.5|
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 -2.59 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