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GuruFocus has detected 5 Warning Signs with Haemonetics Corp $HAE.
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Haemonetics Corp (NYSE:HAE)
Beneish M-Score
-3.20 (As of Today)

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.

Haemonetics Corp has a M-score of -3.20 suggests that the company is not a manipulator.

HAE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.82   Max: -1.9
Current: -3.2

-3.82
-1.9

During the past 13 years, the highest Beneish M-Score of Haemonetics Corp was -1.90. The lowest was -3.82. And the median was -2.74.


Definition

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 Haemonetics Corp 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 * 0.9968+0.528 * 1.0456+0.404 * 0.8737+0.892 * 0.975+0.115 * 0.9693
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.978+4.679 * -0.1488-0.327 * 0.8998
=-3.20

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $152.7 Mil.
Revenue was 228.066 + 227.841 + 220.253 + 209.956 = $886.1 Mil.
Gross Profit was 82.111 + 101.079 + 104.248 + 91.056 = $378.5 Mil.
Total Current Assets was $510.0 Mil.
Total Assets was $1,238.7 Mil.
Property, Plant and Equipment(Net PPE) was $323.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $89.7 Mil.
Selling, General & Admin. Expense(SGA) was $302.7 Mil.
Total Current Liabilities was $211.2 Mil.
Long-Term Debt was $253.6 Mil.
Net Income was -51.14 + 15.393 + 19.825 + -10.346 = $-26.3 Mil.
Non Operating Income was -1.681 + 0 + 0 + 0 = $-1.7 Mil.
Cash Flow from Operations was 34.577 + 55.201 + 39.265 + 30.695 = $159.7 Mil.
Accounts Receivable was $157.1 Mil.
Revenue was 242.342 + 233.384 + 219.693 + 213.413 = $908.8 Mil.
Gross Profit was 89.223 + 108.855 + 105.297 + 102.539 = $405.9 Mil.
Total Current Assets was $488.1 Mil.
Total Assets was $1,319.1 Mil.
Property, Plant and Equipment(Net PPE) was $337.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $89.9 Mil.
Selling, General & Admin. Expense(SGA) was $317.4 Mil.
Total Current Liabilities was $185.6 Mil.
Long-Term Debt was $364.5 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(152.683 / 886.116) / (157.093 / 908.832)
=0.17230588 / 0.17285153
=0.9968

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)
=(405.914 / 908.832) / (378.494 / 886.116)
=0.4466326 / 0.42713821
=1.0456

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (510.029 + 323.862) / 1238.709) / (1 - (488.086 + 337.634) / 1319.128)
=0.32680638 / 0.37404103
=0.8737

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=886.116 / 908.832
=0.975

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))
=(89.911 / (89.911 + 337.634)) / (89.733 / (89.733 + 323.862))
=0.21029599 / 0.21695862
=0.9693

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)
=(302.661 / 886.116) / (317.394 / 908.832)
=0.34155912 / 0.34923286
=0.978

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)
=((253.625 + 211.179) / 1238.709) / ((364.529 + 185.551) / 1319.128)
=0.3752326 / 0.41700275
=0.8998

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
=(-26.268 - -1.681 - 159.738) / 1238.709
=-0.1488

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.

Haemonetics Corp has a M-score of -3.20 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Haemonetics Corp Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DSRI 1.140.8160.9671.02290.99041.02470.91970.91331.07910.9968
GMI 1.0130.96820.98580.99611.03471.05690.96181.04581.06841.0456
AQI 1.59820.91241.4550.94730.88831.70410.98420.99640.91710.8737
SGI 1.14861.15771.07951.04841.07561.22551.05220.970.99830.975
DEPI 1.10081.00960.9560.92591.00121.16260.87751.09731.00290.9693
SGAI 1.0361.05250.99970.95121.0661.07481.07670.95110.94170.978
LVGI 1.09980.88751.21290.73731.08492.97160.92290.9961.0410.8998
TATA -0.0454-0.084-0.0928-0.0517-0.054-0.0319-0.0676-0.073-0.1325-0.1488
M-score -2.21-2.92-2.77-2.60-2.74-2.73-2.85-2.88-3.03-3.20

Haemonetics Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.98340.91330.93111.011.07291.07911.06871.02581.00360.9968
GMI 1.05281.04581.02521.00571.00271.06841.09931.10541.11151.0456
AQI 0.97110.99640.99551.01240.92220.91710.89620.86950.96520.8737
SGI 0.97640.970.95320.95310.96540.99831.00681.01631.00830.975
DEPI 1.09071.09731.05331.0010.99271.00291.00421.02111.0090.9693
SGAI 0.9750.95110.99230.95310.94940.94170.94730.95760.95120.978
LVGI 0.99220.9960.98991.00861.0481.0411.05050.9880.89430.8998
TATA -0.062-0.073-0.0704-0.0644-0.1286-0.1325-0.1566-0.1581-0.1221-0.1488
M-score -2.77-2.88-2.89-2.80-3.08-3.03-3.14-3.16-2.95-3.20
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