H&R Block (BSP:H1RB34) Beneish M-Score : -2.44 (As of May. 11, 2024)

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What is H&R Block Beneish M-Score?

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 -2.44 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for H&R Block's Beneish M-Score or its related term are showing as below:

BSP:H1RB34' s Beneish M-Score Range Over the Past 10 Years
Min: -3.6 Med: -2.71 Max: 5.78
Current: -2.44

During the past 13 years, the highest Beneish M-Score of H&R Block was 5.78. The lowest was -3.60. And the median was -2.71.

H&R Block Beneish M-Score Historical Data

The historical data trend for H&R Block'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.

H&R Block Beneish M-Score Chart

H&R Block Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Jun22

Jun23

Beneish M-Score

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-2.76

-2.25

-0.75

-3.32

-3.45

H&R Block Quarterly Data
	Jan19	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-3.57	-3.60	-3.45	-3.43	-2.44

Competitive Comparison of H&R Block's Beneish M-Score

For the Personal Services subindustry, H&R Block'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.

H&R Block's Beneish M-Score Distribution in the Personal Services Industry

For the Personal Services industry and Consumer Cyclical sector, H&R Block's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where H&R Block's Beneish M-Score falls into.

H&R Block 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 H&R Block for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.1532

0.528 * 0.9772

0.404 * 0.9752

0.892 * 1.0186

0.115 * 1.0521

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.918

4.679 * -0.054167

0.327 * 1.0381

-2.59

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was R$2,312 Mil.
Revenue was 877.471 + 907.733 + 5009.727 + 10904.98 = R$17,700 Mil.
Gross Profit was -591.621 + -373.158 + 2676.267 + 6302.213 = R$8,014 Mil.
Total Current Assets was R$4,404 Mil.
Total Assets was R$13,603 Mil.
Property, Plant and Equipment(Net PPE) was R$2,560 Mil.
Depreciation, Depletion and Amortization(DDA) was R$620 Mil.
Selling, General, & Admin. Expense(SGA) was R$4,013 Mil.
Total Current Liabilities was R$3,653 Mil.
Long-Term Debt & Capital Lease Obligation was R$12,244 Mil.
Net Income was -929.762 + -807.389 + 1467.133 + 3351.364 = R$3,081 Mil.
Non Operating Income was 29.017 + 48.577 + 70.243 + 68.879 = R$217 Mil.
Cash Flow from Operations was -2975.046 + -1654.41 + 1569.954 + 6660.987 = R$3,601 Mil.

Total Receivables was R$1,968 Mil.
Revenue was 872.861 + 943.769 + 5300.453 + 10260.128 = R$17,377 Mil.
Gross Profit was -692.078 + -423.038 + 2680.939 + 6122.475 = R$7,688 Mil.
Total Current Assets was R$4,070 Mil.
Total Assets was R$13,602 Mil.
Property, Plant and Equipment(Net PPE) was R$2,725 Mil.
Depreciation, Depletion and Amortization(DDA) was R$703 Mil.
Selling, General, & Admin. Expense(SGA) was R$4,291 Mil.
Total Current Liabilities was R$3,388 Mil.
Long-Term Debt & Capital Lease Obligation was R$11,925 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)
	=	(2312.059 / 17699.911)	/	(1968.399 / 17377.211)
	=	0.130625	/	0.113275
	=	1.1532

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)
	=	(7688.298 / 17377.211)	/	(8013.701 / 17699.911)
	=	0.442436	/	0.452754
	=	0.9772

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 - (4404.357 + 2559.856) / 13603.29)	/	(1 - (4069.67 + 2725.232) / 13602.497)
	=	0.488049	/	0.500467
	=	0.9752

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
	=	17699.911	/	17377.211
	=	1.0186

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))
	=	(702.92 / (702.92 + 2725.232))	/	(619.637 / (619.637 + 2559.856))
	=	0.205043	/	0.194885
	=	1.0521

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)
	=	(4012.734 / 17699.911)	/	(4291.492 / 17377.211)
	=	0.226709	/	0.246961
	=	0.918

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)
	=	((12243.512 + 3653.227) / 13603.29)	/	((11924.609 + 3387.652) / 13602.497)
	=	1.168595	/	1.125695
	=	1.0381

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
	=	(3081.346 - 216.716	-	3601.485)	/	13603.29
	=	-0.054167

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.

H&R Block has a M-score of -2.59 suggests that the company is unlikely to be a manipulator.

H&R Block Beneish M-Score Related Terms

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H&R Block (BSP:H1RB34) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Personal Services » H&R Block Inc (BSP:H1RB34) » Definitions » Beneish M-Score

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Address

One H&R Block Way, Kansas City, MO, USA, 64105

Website

https://www.hrblock.com

H&R Block Inc provides income tax return preparation services, digital do-it-yourself tax solutions, and other services related to income tax preparation to the general public primarily in the United States, Canada, and Australia. The company mainly prepares tax returns for customers within the United States through its company-owned offices, franchise locations, and online tax software. The vast majority of H&R Block's offices are located in the U.S. The company derives most of its total revenue from the U.S. assisted tax preparation fees. Revenue from franchise and product royalties and digital do-it-yourself tax solutions is also relatively significant.

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