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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 * 1.1619||+||0.528 * 1.0165||+||0.404 * 1.3305||+||0.892 * 1.0134||+||0.115 * 0.8397|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0335||+||4.679 * -0.0274||-||0.327 * 2.8853|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $98.2 Mil.|
Revenue was 177.5 + 186.4 + 190.5 + 193.3 = $747.7 Mil.
Gross Profit was 137.5 + 146.4 + 150.3 + 152.7 = $586.9 Mil.
Total Current Assets was $322.9 Mil.
Total Assets was $1,270.9 Mil.
Property, Plant and Equipment(Net PPE) was $56.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.1 Mil.
Selling, General & Admin. Expense(SGA) was $384.5 Mil.
Total Current Liabilities was $274.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -1.2 + 35.7 + 32.6 + 30.3 = $97.4 Mil.
Non Operating Income was -2.5 + 1.2 + 0.2 + -0.3 = $-1.4 Mil.
Cash Flow from Operations was -2.9 + 56.4 + 44.1 + 36 = $133.6 Mil.
|Accounts Receivable was $83.4 Mil.
Revenue was 183.5 + 189.9 + 180 + 184.4 = $737.8 Mil.
Gross Profit was 147 + 151.5 + 143.7 + 146.5 = $588.7 Mil.
Total Current Assets was $307.3 Mil.
Total Assets was $787.0 Mil.
Property, Plant and Equipment(Net PPE) was $64.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.8 Mil.
Selling, General & Admin. Expense(SGA) was $367.1 Mil.
Total Current Liabilities was $59.0 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)|
|=||(98.2 / 747.7)||/||(83.4 / 737.8)|
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)|
|=||(588.7 / 737.8)||/||(586.9 / 747.7)|
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 - (322.9 + 56.8) / 1270.9)||/||(1 - (307.3 + 64.9) / 787)|
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))|
|=||(25.8 / (25.8 + 64.9))||/||(29.1 / (29.1 + 56.8))|
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)|
|=||(384.5 / 747.7)||/||(367.1 / 737.8)|
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 + 274.9) / 1270.9)||/||((0 + 59) / 787)|
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|
|=||(97.4 - -1.4||-||133.6)||/||1270.9|
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 -2.95 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