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Change Healthcare Beneish M-Score

: -2.87 (As of Today)
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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 -2.87 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

CHNG' s Beneish M-Score Range Over the Past 10 Years
Min: -2.87   Med: -2.49   Max: 9.49
Current: -2.87

During the past 6 years, the highest Beneish M-Score of Change Healthcare was 9.49. The lowest was -2.87. And the median was -2.49.


Change Healthcare Beneish M-Score Historical Data

The historical data trend for Change Healthcare's Beneish M-Score can be seen below:

* 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.

* Premium members only.

Change Healthcare Annual Data
Trend Mar17 Mar18 Mar19 Mar20 Mar21 Mar22
Beneish M-Score
Premium Member Only - - - 9.49 -2.83

Change Healthcare Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.09 -2.33 -2.64 -2.83 -2.87

Competitive Comparison

For the Health Information Services subindustry, Change Healthcare's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Change Healthcare Beneish M-Score Distribution

For the Healthcare Providers & Services industry and Healthcare sector, Change Healthcare's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Change Healthcare's Beneish M-Score falls into.



Change Healthcare 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 Change Healthcare 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 * 0.9008+0.528 * 0.9779+0.404 * 0.9995+0.892 * 1.0715+0.115 * 0.9093
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0072+4.679 * -0.0744-0.327 * 0.9785
=-2.87

* 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 (Jun22) TTM:Last Year (Jun21) TTM:
Total Receivables was $848 Mil.
Revenue was 884.469 + 920.131 + 866.065 + 826.764 = $3,497 Mil.
Gross Profit was 474.247 + 496.729 + 457.041 + 427.582 = $1,856 Mil.
Total Current Assets was $1,146 Mil.
Total Assets was $9,637 Mil.
Property, Plant and Equipment(Net PPE) was $188 Mil.
Depreciation, Depletion and Amortization(DDA) was $689 Mil.
Selling, General, & Admin. Expense(SGA) was $754 Mil.
Total Current Liabilities was $933 Mil.
Long-Term Debt & Capital Lease Obligation was $4,535 Mil.
Net Income was -23.168 + 7.09 + -24.472 + -36.404 = $-77 Mil.
Non Operating Income was -6.051 + -8.044 + -7.824 + -7.689 = $-30 Mil.
Cash Flow from Operations was 83.315 + 258.086 + 177.441 + 151.244 = $670 Mil.
Total Receivables was $879 Mil.
Revenue was 867.856 + 855.16 + 785.141 + 755.936 = $3,264 Mil.
Gross Profit was 464.585 + 446.793 + 402.891 + 379.26 = $1,694 Mil.
Total Current Assets was $1,136 Mil.
Total Assets was $10,032 Mil.
Property, Plant and Equipment(Net PPE) was $249 Mil.
Depreciation, Depletion and Amortization(DDA) was $623 Mil.
Selling, General, & Admin. Expense(SGA) was $699 Mil.
Total Current Liabilities was $1,013 Mil.
Long-Term Debt & Capital Lease Obligation was $4,804 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)
=(848.035 / 3497.429) / (878.582 / 3264.093)
=0.24247383 / 0.26916574
=0.9008

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)
=(1693.529 / 3264.093) / (1855.599 / 3497.429)
=0.51883601 / 0.53056088
=0.9779

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 - (1146.401 + 188.204) / 9636.981) / (1 - (1135.521 + 249.076) / 10031.851)
=0.86151213 / 0.86197991
=0.9995

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
=3497.429 / 3264.093
=1.0715

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))
=(622.683 / (622.683 + 249.076)) / (689.413 / (689.413 + 188.204))
=0.71428342 / 0.7855511
=0.9093

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)
=(754.484 / 3497.429) / (699.126 / 3264.093)
=0.21572532 / 0.21418691
=1.0072

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)
=((4535.145 + 932.805) / 9636.981) / ((4803.678 + 1013.461) / 10031.851)
=0.56739242 / 0.57986697
=0.9785

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
=(-76.954 - -29.608 - 670.086) / 9636.981
=-0.0744

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.

Change Healthcare has a M-score of -2.87 suggests that the company is unlikely to be a manipulator.


Change Healthcare Beneish M-Score Related Terms

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Change Healthcare Business Description

Change Healthcare logo
Traded in Other Exchanges
Address
424 Church Street, Suite 1400, Nashville, TN, USA, 37219
Change Healthcare is a spin-off of various healthcare processing and consulting services acquired by McKesson over numerous years. Recently, these processing assets were contributed to a joint venture and in June 2019 public shares were issued with McKesson retaining the majority interest. As of the end of the March 2020 quarter, McKesson distributed all its interest in the public processor. Core services consist of insurance (healthcare) claim clearinghouse for healthcare payers in addition to administrative and consulting services to assist healthcare providers improve reimbursement coding, billing, and collections.
Executives
Byers Tracy officer: SVP and GM, Enterprise Imaging C/O CHANGE HEALTHCARE INC. 424 CHURCH STREET, SUITE 1400 NASHVILLE TN 37219
Domenici Nella director C/O ALLIANCEBERNSTEIN 1345 AVENUE OF THE AMERICAS NEW YORK NY 10105
Martin Steven B. officer: EVP, Enterprise Technology 3055 LEBANON PIKE SUITE 1000 NASHVILLE TN 37214
Mckenzie Diana director METLIFE 200 PARK AVENUE NEW YORK NY 10166
Blackstone Family Investment Partnership Vi L.p. 10 percent owner C/O THE BLACKSTONE GROUP 345 PARK AVENUE NEW YORK NY 10154
O'reilly Roderick H. officer: See Remarks C/O CHANGE HEALTHCARE INC. 3055 LEBANON PIKE, SUITE 1000 NASHVILLE TN 37214
Bcp Vi Side-by-side Gp L.l.c. 10 percent owner C/O THE BLACKSTONE GROUP 345 PARK AVENUE NEW YORK NY 10154
Mcenery Thomas officer: EVP & Chief Marketing Officer
Simpkins Neil P director C/O BLACKSTONE GROUP 345 PARK AVENUE NEW YORK NY 10154
Whitley-taylor Linda officer: EVP & Chief People Officer AMERIGROUP CORPORATION 4425 CORPORATION LANE VIRGINIA BEACH VA 23462
Roe Phillip W. director 20 BURTON HILLS BOULEVARD SUITE 100 NASHVILLE TN 37215
Joshi Kriten officer: See Remarks C/O CHANGE HEALTHCARE INC. 3055 LEBANON PIKE, SUITE 1000 NASHVILLE TN 37214
Rareshide Paul officer: SVP, Corporate Controller C/O CHANGE HEALTHCARE INC. 3055 LEBANON PIKE, SUITE 1000 NASHVILLE TN 37214
Laur Thomas officer: See Remarks C/O CHANGE HEALTHCARE INC. 3055 LEBANON PIKE, SUITE 1000 NASHVILLE TN 37214
Calhoun August officer: See Remarks C/O CHANGE HEALTHCARE INC. 3055 LEBANON PIKE, SUITE 1000 NASHVILLE TN 37214

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