GURUFOCUS.COM » STOCK LIST » USA » NYSE » First Horizon Corp (NYSE:FHN) » Definitions » Beneish M-Score
Switch to:

First Horizon (NYSE:FHN) Beneish M-Score

: -2.48 (As of Today)
View and export this data going back to 1973. Start your Free Trial

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.48 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for First Horizon's Beneish M-Score or its related term are showing as below:

FHN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.33   Med: -2.48   Max: 0.45
Current: -2.48

During the past 13 years, the highest Beneish M-Score of First Horizon was 0.45. The lowest was -4.33. And the median was -2.48.


First Horizon Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 First Horizon 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+0.528 * 1+0.404 * 1.1583+0.892 * 0.9611+0.115 * 0.5756
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9494+4.679 * -0.0199-0.327 * 0.682
=-2.48

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Sep22) TTM:Last Year (Sep21) TTM:
Total Receivables was $0 Mil.
Revenue was 853 + 720 + 688 + 702 = $2,963 Mil.
Gross Profit was 853 + 720 + 688 + 702 = $2,963 Mil.
Total Current Assets was $13,152 Mil.
Total Assets was $80,299 Mil.
Property, Plant and Equipment(Net PPE) was $622 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General, & Admin. Expense(SGA) was $1,220 Mil.
Total Current Liabilities was $759 Mil.
Long-Term Debt & Capital Lease Obligation was $1,597 Mil.
Net Income was 265 + 174 + 195 + 227 = $861 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 768 + 824 + 694 + 173 = $2,459 Mil.
Total Receivables was $0 Mil.
Revenue was 738 + 763 + 790 + 792 = $3,083 Mil.
Gross Profit was 738 + 763 + 790 + 792 = $3,083 Mil.
Total Current Assets was $24,520 Mil.
Total Assets was $88,537 Mil.
Property, Plant and Equipment(Net PPE) was $692 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General, & Admin. Expense(SGA) was $1,337 Mil.
Total Current Liabilities was $2,225 Mil.
Long-Term Debt & Capital Lease Obligation was $1,584 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(0 / 2963) / (0 / 3083)
=0 / 0
=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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3083 / 3083) / (2963 / 2963)
=1 / 1
=1

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (13152 + 622) / 80299) / (1 - (24520 + 692) / 88537)
=0.82846611 / 0.7152377
=1.1583

4. SGI = Sales Growth Index

Ratio of Revenue 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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2963 / 3083
=0.9611

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(56 / (56 + 692)) / (93 / (93 + 622))
=0.07486631 / 0.13006993
=0.5756

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(1220 / 2963) / (1337 / 3083)
=0.41174485 / 0.4336685
=0.9494

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((1597 + 759) / 80299) / ((1584 + 2225) / 88537)
=0.02934034 / 0.04302156
=0.682

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(861 - 0 - 2459) / 80299
=-0.0199

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

First Horizon has a M-score of -2.48 suggests that the company is unlikely to be a manipulator.


First Horizon Beneish M-Score Related Terms

Thank you for viewing the detailed overview of First Horizon's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


First Horizon (NYSE:FHN) Business Description

First Horizon logo
Address
165 Madison Avenue, Memphis, TN, USA, 38103
First Horizon Corp is the parent company of First Tennessee Bank, a prominent regional bank with about 200 branches around Tennessee. The regional bank is responsible for roughly 65% of its revenue, while capital markets make a 25% contribution. The remainder is split between the firm's non-strategic (wind-down) and corporate operations. First Horizon concentrates on offering a variety of banking products mainly in its home state, where it has the second- largest deposit franchise with a 13% deposit market share.
Executives
Dmuchowski Hope officer: Sr. EVP & CFO 165 MADISON AVE MEMPHIS TN 38103
Casbon John N director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Locascio Tammy officer: Sr. EVP, Chief HR Officer 165 MADISON AVE MEMPHIS TN 38103
Kemp Sr James Michael director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Maples Ricky E director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Akins Terry Lawson officer: Sr. EVP, Chief Risk Officer 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Ardoin Elizabeth A officer: SEVP, Chief Communications Ofc 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Sugranes Rosa director 2975 N.W. 77TH AVE DORAL FL 33132
Restel Anthony J officer: SEVP Chief Operating Officer 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Shea E Stewart Iii director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Fenstermaker William H director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Byrd Daryl G director, officer: Executive Chairman of Board 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Barton Harry V Jr director 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Brown Michael J officer: President - Regional Banking 200 WEST CONGRESS STREET LAFAYETTE LA 70501
Davidson Wendy P director 2210 WEST OAKLAWN DRIVE SPRINGDALE AR 72762
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
premium membership