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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 * 1.2693||+||0.528 * 1.0204||+||0.404 * 1.3832||+||0.892 * 1.0056||+||0.115 * 0.766|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1273||+||4.679 * -0.0313||-||0.327 * 2.9729|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $107.6 Mil.|
Revenue was 196.5 + 177.5 + 186.4 + 190.5 = $750.9 Mil.
Gross Profit was 152.1 + 137.5 + 146.4 + 150.3 = $586.3 Mil.
Total Current Assets was $341.6 Mil.
Total Assets was $1,276.1 Mil.
Property, Plant and Equipment(Net PPE) was $54.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.3 Mil.
Selling, General & Admin. Expense(SGA) was $414.0 Mil.
Total Current Liabilities was $82.8 Mil.
Long-Term Debt was $204.0 Mil.
Net Income was 5.9 + -1.2 + 35.7 + 32.6 = $73.0 Mil.
Non Operating Income was 1.2 + -2.5 + 1.2 + 0.2 = $0.1 Mil.
Cash Flow from Operations was 31.4 + -2.9 + 56.4 + 28 = $112.9 Mil.
|Accounts Receivable was $84.3 Mil.
Revenue was 193.3 + 183.5 + 189.9 + 180 = $746.7 Mil.
Gross Profit was 152.7 + 147 + 151.5 + 143.7 = $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.
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)|
|=||(107.6 / 750.9)||/||(84.3 / 746.7)|
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)|
|=||(594.9 / 746.7)||/||(586.3 / 750.9)|
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 - (341.6 + 54.7) / 1276.1)||/||(1 - (375.5 + 61.7) / 871.7)|
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))|
|=||(26.5 / (26.5 + 61.7))||/||(35.3 / (35.3 + 54.7))|
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)|
|=||(414 / 750.9)||/||(365.2 / 746.7)|
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)|
|=||((204 + 82.8) / 1276.1)||/||((0 + 65.9) / 871.7)|
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|
|=||(73 - 0.1||-||112.9)||/||1276.1|
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 -2.90 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