Edwards Lifesciences (LTS:0REN) Beneish M-Score : -1.85 (As of May. 22, 2024)

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What is Edwards Lifesciences 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 -1.85 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LTS:0REN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.24 Med: -2.3 Max: -1.85
Current: -1.85

During the past 13 years, the highest Beneish M-Score of Edwards Lifesciences was -1.85. The lowest was -4.24. And the median was -2.30.

Edwards Lifesciences Beneish M-Score Historical Data

The historical data trend for Edwards Lifesciences'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.

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Edwards Lifesciences Beneish M-Score Chart

Edwards Lifesciences Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.39

-2.32

-2.49

-2.29

-1.99

Edwards Lifesciences Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.22	-2.00	-2.08	-1.99	-1.85

Competitive Comparison of Edwards Lifesciences's Beneish M-Score

For the Medical Devices subindustry, Edwards Lifesciences'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.

Edwards Lifesciences's Beneish M-Score Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Edwards Lifesciences's Beneish M-Score distribution charts can be found below:

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

Edwards Lifesciences 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 Edwards Lifesciences 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 * 1.0342

0.528 * 1.0418

0.404 * 0.8983

0.892 * 1.0446

0.115 * 1.041

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0295

4.679 * 0.109596

0.327 * 0.9092

-1.89

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was CHF779 Mil.
Revenue was 1420.161 + 1326.69 + 1332.218 + 1377.792 = CHF5,457 Mil.
Gross Profit was 1077.516 + 1018.043 + 1016.998 + 1068.955 = CHF4,182 Mil.
Total Current Assets was CHF3,706 Mil.
Total Assets was CHF8,652 Mil.
Property, Plant and Equipment(Net PPE) was CHF1,658 Mil.
Depreciation, Depletion and Amortization(DDA) was CHF132 Mil.
Selling, General, & Admin. Expense(SGA) was CHF1,667 Mil.
Total Current Liabilities was CHF987 Mil.
Long-Term Debt & Capital Lease Obligation was CHF599 Mil.
Net Income was 312.698 + 319.89 + 346.256 + 276.513 = CHF1,255 Mil.
Non Operating Income was -39.809 + -20.323 + 3.239 + -106.968 = CHF-164 Mil.
Cash Flow from Operations was -47.54 + 118.132 + 370.185 + 30.253 = CHF471 Mil.

Total Receivables was CHF721 Mil.
Revenue was 1350.86 + 1256.076 + 1283.783 + 1332.958 = CHF5,224 Mil.
Gross Profit was 1045.908 + 1015.817 + 1036.759 + 1071.586 = CHF4,170 Mil.
Total Current Assets was CHF3,015 Mil.
Total Assets was CHF8,007 Mil.
Property, Plant and Equipment(Net PPE) was CHF1,605 Mil.
Depreciation, Depletion and Amortization(DDA) was CHF133 Mil.
Selling, General, & Admin. Expense(SGA) was CHF1,550 Mil.
Total Current Liabilities was CHF1,001 Mil.
Long-Term Debt & Capital Lease Obligation was CHF613 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)
	=	(779.213 / 5456.861)	/	(721.242 / 5223.677)
	=	0.142795	/	0.138072
	=	1.0342

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)
	=	(4170.07 / 5223.677)	/	(4181.512 / 5456.861)
	=	0.798302	/	0.766285
	=	1.0418

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 - (3705.906 + 1658.394) / 8651.676)	/	(1 - (3014.539 + 1605.28) / 8006.686)
	=	0.37997	/	0.423005
	=	0.8983

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
	=	5456.861	/	5223.677
	=	1.0446

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))
	=	(133.096 / (133.096 + 1605.28))	/	(131.648 / (131.648 + 1658.394))
	=	0.076563	/	0.073545
	=	1.041

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)
	=	(1666.694 / 5456.861)	/	(1549.697 / 5223.677)
	=	0.305431	/	0.296668
	=	1.0295

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)
	=	((599.272 + 987.057) / 8651.676)	/	((613.329 + 1001.391) / 8006.686)
	=	0.183355	/	0.201671
	=	0.9092

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
	=	(1255.357 - -163.861	-	471.03)	/	8651.676
	=	0.109596

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.

Edwards Lifesciences has a M-score of -1.89 suggests that the company is unlikely to be a manipulator.

Edwards Lifesciences Beneish M-Score Related Terms

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Edwards Lifesciences (LTS:0REN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Edwards Lifesciences Corp (LTS:0REN) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

EW:USA EW:Mexico 1EW:Italy EWL:Germany E1WL34:Brazil EWLS:Austria

Address

One Edwards Way, Irvine, CA, USA, 92614

Website

https://www.edwards.com

Spun off from Baxter International in 2000, Edwards Lifesciences designs, manufactures, and markets a range of medical devices and equipment for advanced stages of structural heart disease. It has established itself as a leader across key products, including surgical tissue heart valves, transcatheter valve technologies, surgical clips, catheters, and monitoring systems used to measure a patient's heart function during surgery. The firm derives about 55% of its total sales from outside the U.S.

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