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GuruFocus has detected 5 Warning Signs with Henry Schein Inc $HSIC.
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Henry Schein Inc (NAS:HSIC)
Beneish M-Score
-2.51 (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.

Henry Schein Inc has a M-score of -2.51 suggests that the company is not a manipulator.

HSIC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Max: -1.38
Current: -2.51

-2.99
-1.38

During the past 13 years, the highest Beneish M-Score of Henry Schein Inc was -1.38. The lowest was -2.99. And the median was -2.52.


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 Henry Schein 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 * 0.987+0.528 * 1.0166+0.404 * 0.9998+0.892 * 1.083+0.115 * 0.9828
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.984+4.679 * -0.0156-0.327 * 1.0879
=-2.51

* 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 $1,363 Mil.
Revenue was 2922.948 + 3120.934 + 2865.148 + 2872.63 = $11,782 Mil.
Gross Profit was 822.92 + 861.857 + 789.491 + 803.316 = $3,278 Mil.
Total Current Assets was $3,392 Mil.
Total Assets was $6,845 Mil.
Property, Plant and Equipment(Net PPE) was $336 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $2,446 Mil.
Total Current Liabilities was $2,285 Mil.
Long-Term Debt was $708 Mil.
Net Income was 140.748 + 139.216 + 133.713 + 120.097 = $534 Mil.
Non Operating Income was -0.045 + -0.327 + -0.199 + 0.268 = $-0 Mil.
Cash Flow from Operations was -52.591 + 264.508 + 178.081 + 250.67 = $641 Mil.
Accounts Receivable was $1,275 Mil.
Revenue was 2712.956 + 2850.918 + 2685.835 + 2629.32 = $10,879 Mil.
Gross Profit was 777.842 + 799.278 + 748.908 + 750.678 = $3,077 Mil.
Total Current Assets was $3,271 Mil.
Total Assets was $6,601 Mil.
Property, Plant and Equipment(Net PPE) was $324 Mil.
Depreciation, Depletion and Amortization(DDA) was $163 Mil.
Selling, General & Admin. Expense(SGA) was $2,296 Mil.
Total Current Liabilities was $1,988 Mil.
Long-Term Debt was $666 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)
=(1362.832 / 11781.66) / (1274.95 / 10879.029)
=0.11567402 / 0.11719336
=0.987

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)
=(3076.706 / 10879.029) / (3277.584 / 11781.66)
=0.28281072 / 0.27819374
=1.0166

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 - (3392.257 + 336.465) / 6844.62) / (1 - (3271.003 + 324.283) / 6600.57)
=0.45523316 / 0.45530674
=0.9998

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
=11781.66 / 10879.029
=1.083

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))
=(162.945 / (162.945 + 324.283)) / (173.562 / (173.562 + 336.465))
=0.33443275 / 0.34029963
=0.9828

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)
=(2446.403 / 11781.66) / (2295.78 / 10879.029)
=0.20764502 / 0.21102802
=0.984

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)
=((708.422 + 2285.432) / 6844.62) / ((666.283 + 1987.504) / 6600.57)
=0.43740251 / 0.40205422
=1.0879

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
=(533.774 - -0.303 - 640.668) / 6844.62
=-0.0156

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.

Henry Schein Inc has a M-score of -2.51 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.

Henry Schein Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.99830.95790.96551.06070.88481.09050.97190.9851.06420.9368
GMI 0.99880.98831.00351.01651.01751.01061.00960.98970.99061.0144
AQI 1.04670.9721.00221.3060.99540.94941.01191.0620.9571.0085
SGI 1.16311.08191.02351.15121.13331.0481.06941.08481.02491.0886
DEPI 0.9740.95921.00310.83520.9330.97570.99140.96560.98530.9884
SGAI 0.97660.99960.98570.98120.98930.97360.98781.0230.99670.9889
LVGI 0.93670.97230.85970.99941.00341.06570.96771.06371.06071.1128
TATA -0.0487-0.0388-0.0229-0.0154-0.0399-0.0043-0.0418-0.0213-0.0165-0.0166
M-score -2.52-2.64-2.55-2.24-2.65-2.41-2.62-2.53-2.52-2.56

Henry Schein Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.9850.91760.93321.00951.06421.10931.04281.03650.93680.987
GMI 0.98970.99150.9840.98270.99060.9951.00641.01281.01441.0166
AQI 1.0621.03641.01770.97550.9570.95050.96690.9881.00850.9998
SGI 1.08481.0731.05021.0281.02491.04561.06751.07831.08861.083
DEPI 0.96560.91760.95820.95870.98531.02910.97370.99440.98840.9828
SGAI 1.0231.01341.01441.00510.99670.99720.98870.99040.98890.984
LVGI 1.06371.0110.98820.9861.06071.08511.07991.10621.11281.0879
TATA -0.0213-0.0261-0.0263-0.0126-0.0165-0.0075-0.0136-0.0234-0.0166-0.0156
M-score -2.53-2.62-2.62-2.53-2.52-2.42-2.48-2.52-2.56-2.51
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