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GuruFocus has detected 7 Warning Signs with Myriad Genetics Inc $MYGN.
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Myriad Genetics Inc (NAS:MYGN)
Beneish M-Score
-3.41 (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.

Myriad Genetics Inc has a M-score of -3.41 suggests that the company is not a manipulator.

MYGN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.5   Max: 9.51
Current: -3.41

-4.5
9.51

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.


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 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 * 1.26+0.528 * 1.0221+0.404 * 1.3616+0.892 * 1.0001+0.115 * 0.6976
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2227+4.679 * -0.0567-0.327 * 4.028
=-3.41

* 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 $114.8 Mil.
Revenue was 196.9 + 196.5 + 177.5 + 186.4 = $757.3 Mil.
Gross Profit was 152.6 + 152.1 + 137.5 + 146.4 = $588.6 Mil.
Total Current Assets was $348.3 Mil.
Total Assets was $1,267.8 Mil.
Property, Plant and Equipment(Net PPE) was $53.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.7 Mil.
Selling, General & Admin. Expense(SGA) was $445.6 Mil.
Total Current Liabilities was $221.7 Mil.
Long-Term Debt was $167.1 Mil.
Net Income was 4.2 + 5.9 + -1.2 + 23.3 = $32.2 Mil.
Non Operating Income was -3.7 + 1.2 + -2.5 + 1 = $-4.0 Mil.
Cash Flow from Operations was 41.1 + 31.4 + -2.9 + 38.5 = $108.1 Mil.
Accounts Receivable was $91.1 Mil.
Revenue was 190.5 + 193.3 + 183.5 + 189.9 = $757.2 Mil.
Gross Profit was 150.3 + 152.7 + 147 + 151.5 = $601.5 Mil.
Total Current Assets was $372.4 Mil.
Total Assets was $868.2 Mil.
Property, Plant and Equipment(Net PPE) was $60.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.6 Mil.
Selling, General & Admin. Expense(SGA) was $364.4 Mil.
Total Current Liabilities was $66.1 Mil.
Long-Term Debt was $0.0 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)
=(114.8 / 757.3) / (91.1 / 757.2)
=0.15159118 / 0.12031167
=1.26

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)
=(601.5 / 757.2) / (588.6 / 757.3)
=0.79437401 / 0.77723491
=1.0221

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 - (348.3 + 53) / 1267.8) / (1 - (372.4 + 60) / 868.2)
=0.68346742 / 0.50195807
=1.3616

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
=757.3 / 757.2
=1.0001

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))
=(26.6 / (26.6 + 60)) / (41.7 / (41.7 + 53))
=0.30715935 / 0.44033791
=0.6976

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)
=(445.6 / 757.3) / (364.4 / 757.2)
=0.58840618 / 0.4812467
=1.2227

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)
=((167.1 + 221.7) / 1267.8) / ((0 + 66.1) / 868.2)
=0.30667298 / 0.07613453
=4.028

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
=(32.2 - -4 - 108.1) / 1267.8
=-0.0567

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 -3.41 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.

Myriad Genetics Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.08650.92180.74050.97550.94850.97461.26250.68411.12741.0254
GMI 0.9430.94040.98380.98990.99331.01630.99961.0121.081.006
AQI 16.10620.70530.90350.97721.70561.27281.02941.55860.95681.0635
SGI 1.37491.41831.48171.09821.10871.23361.23631.26910.92921.0423
DEPI 1.10441.0280.7681.2620.97980.87481.1170.85511.05150.8632
SGAI 1.10041.06170.85481.05080.9490.99460.97741.02361.20420.9413
LVGI 0.9661.57540.46740.67051.21721.15661.23261.21910.91640.9158
TATA -0.026-0.11130.0066-0.0049-0.0487-0.0423-0.033-0.0146-0.0792-0.0479
M-score 3.89-3.05-2.13-2.32-2.44-2.44-2.23-2.46-2.77-2.59

Myriad Genetics Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.98171.17941.12741.11151.00760.94211.02541.16191.26931.26
GMI 1.06371.07761.081.05361.02941.01461.0061.01651.02041.0221
AQI 1.48391.00550.95680.99110.93840.91471.06351.33051.38321.3616
SGI 0.98330.94550.92920.9911.03011.04881.04231.01341.00561.0001
DEPI 0.73320.95011.05151.00681.03570.83690.86320.83970.7660.6976
SGAI 1.22241.19061.20421.10511.01270.98220.94131.03351.12731.2227
LVGI 0.85930.97560.91640.89550.98780.8830.91582.88532.97294.028
TATA -0.0018-0.0457-0.0792-0.0882-0.0621-0.0662-0.0479-0.0302-0.0394-0.0567
M-score -2.31-2.56-2.77-2.76-2.74-2.80-2.59-2.96-2.94-3.41
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