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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 -2.43.
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 * 1.0076||+||0.528 * 1.0294||+||0.404 * 0.9384||+||0.892 * 1.0301||+||0.115 * 1.0357|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0126||+||4.679 * -0.0554||-||0.327 * 0.9878|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $84.3 Mil.|
Revenue was 193.3 + 183.5 + 189.884 + 179.985 = $746.7 Mil.
Gross Profit was 152.7 + 147 + 151.495 + 143.692 = $594.9 Mil.
Total Current Assets was $375.5 Mil.
Total Assets was $871.7 Mil.
Property, Plant and Equipment(Net PPE) was $61.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.5 Mil.
Selling, General & Admin. Expense(SGA) was $365.2 Mil.
Total Current Liabilities was $65.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 30.3 + 26.6 + 18.712 + 21.475 = $97.1 Mil.
Non Operating Income was -0.3 + 0.1 + -0.817 + -0.298 = $-1.3 Mil.
Cash Flow from Operations was 40.9 + 24.9 + 51.044 + 29.856 = $146.7 Mil.
|Accounts Receivable was $81.2 Mil.
Revenue was 184.4 + 168.8 + 188.75 + 182.924 = $724.9 Mil.
Gross Profit was 146.5 + 133.9 + 157.771 + 156.315 = $594.5 Mil.
Total Current Assets was $320.1 Mil.
Total Assets was $781.9 Mil.
Property, Plant and Equipment(Net PPE) was $46.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.0 Mil.
Selling, General & Admin. Expense(SGA) was $350.1 Mil.
Total Current Liabilities was $59.8 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)|
|=||(84.3 / 746.669)||/||(81.222 / 724.874)|
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)|
|=||(147 / 724.874)||/||(152.7 / 746.669)|
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 - (375.5 + 61.7) / 871.7)||/||(1 - (320.088 + 46.458) / 781.854)|
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))|
|=||(20.989 / (20.989 + 46.458))||/||(26.5 / (26.5 + 61.7))|
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)|
|=||(365.164 / 746.669)||/||(350.079 / 724.874)|
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 + 65.9) / 871.7)||/||((0 + 59.837) / 781.854)|
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|
|=||(97.087 - -1.315||-||146.7)||/||871.7|
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 -2.71 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