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Encompass Health (Encompass Health) Beneish M-Score

: -2.77 (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 -2.77 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

EHC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.93   Med: -2.74   Max: -2.5
Current: -2.77

During the past 13 years, the highest Beneish M-Score of Encompass Health was -2.50. The lowest was -2.93. And the median was -2.74.


Encompass Health Beneish M-Score Historical Data

The historical data trend for Encompass Health'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.

Encompass Health Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.68 -2.56 -2.71 -2.93 -2.77

Encompass Health Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 Premium Member Only -2.93 -3.20 -3.07 -2.79 -2.77

Competitive Comparison

For the Medical Care Facilities subindustry, Encompass Health'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.


Encompass Health Beneish M-Score Distribution

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

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



Encompass Health 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 Encompass Health 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 * 1.0319+0.528 * 0.9989+0.404 * 0.915+0.892 * 1.1041+0.115 * 0.991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9948+4.679 * -0.084835-0.327 * 0.9297
=-2.77

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $612 Mil.
Revenue was 1246.8 + 1206.9 + 1187.1 + 1160.4 = $4,801 Mil.
Gross Profit was 1188.2 + 1153 + 1135.1 + 1106.6 = $4,583 Mil.
Total Current Assets was $842 Mil.
Total Assets was $6,102 Mil.
Property, Plant and Equipment(Net PPE) was $3,510 Mil.
Depreciation, Depletion and Amortization(DDA) was $274 Mil.
Selling, General, & Admin. Expense(SGA) was $2,858 Mil.
Total Current Liabilities was $656 Mil.
Long-Term Debt & Capital Lease Obligation was $2,884 Mil.
Net Income was 87.6 + 85.3 + 91.4 + 87.7 = $352 Mil.
Non Operating Income was 9.8 + 1.5 + 3.6 + 4 = $19 Mil.
Cash Flow from Operations was 201 + 215.2 + 206.7 + 227.9 = $851 Mil.
Total Receivables was $537 Mil.
Revenue was 1137.3 + 1089.5 + 1062.5 + 1059.3 = $4,349 Mil.
Gross Profit was 1083.4 + 1038.4 + 1015.2 + 1009.5 = $4,147 Mil.
Total Current Assets was $717 Mil.
Total Assets was $5,637 Mil.
Property, Plant and Equipment(Net PPE) was $3,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $244 Mil.
Selling, General, & Admin. Expense(SGA) was $2,602 Mil.
Total Current Liabilities was $576 Mil.
Long-Term Debt & Capital Lease Obligation was $2,942 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)
=(611.6 / 4801.2) / (536.8 / 4348.6)
=0.127385 / 0.123442
=1.0319

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)
=(4146.5 / 4348.6) / (4582.9 / 4801.2)
=0.953525 / 0.954532
=0.9989

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 - (841.8 + 3509.5) / 6102.4) / (1 - (717.2 + 3151.7) / 5636.5)
=0.286953 / 0.313599
=0.915

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
=4801.2 / 4348.6
=1.1041

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))
=(243.6 / (243.6 + 3151.7)) / (273.9 / (273.9 + 3509.5))
=0.071746 / 0.072395
=0.991

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)
=(2858.1 / 4801.2) / (2602.3 / 4348.6)
=0.595289 / 0.598422
=0.9948

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)
=((2883.9 + 656.4) / 6102.4) / ((2941.5 + 575.9) / 5636.5)
=0.580149 / 0.62404
=0.9297

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
=(352 - 18.9 - 850.8) / 6102.4
=-0.084835

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.

Encompass Health has a M-score of -2.77 suggests that the company is unlikely to be a manipulator.


Encompass Health Beneish M-Score Related Terms

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Encompass Health (Encompass Health) Business Description

Traded in Other Exchanges
Address
9001 Liberty Parkway, Birmingham, AL, USA, 35242
Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.
Executives
Douglas E Coltharp officer: EVP, Chief Financial Officer C/O UNDER ARMOUR, INC., 1020 HULL STREET, BALTIMORE MD 21230
Elissa Joy Charbonneau officer: Chief Medical Officer 24 HAWTHORNE CIRCLE, YARMOUTH ME 04096
Mark J Tarr officer: Executive VP Operations C/O ENCOMPASS HEALTH CORPORATION, 9001 LIBERTY PARKWAY, BIRMINGHAM AL 35242
Greg D Carmichael director
Kevin J. O'connor director 13995 PASTEUR BOULEVARD, PALM BEACH GARDENS FL 33418
Terrance Williams director 7184 BIDDICK, NEW ALBANY OH 43054
Christopher R Reidy director ONE ADP BLVD, ROSELAND NJ 07068
Andrew L Price officer: Interim Chief Accting Officer 3660 GRANDVIEW PARKWAY, SUITE 200, BIRMINGHAM AL 35243
Barbara Ann Jacobsmeyer officer: EVP, Operations 2122 ACTON PARK WAY, BIRMINGHAM AL 35243
Donald L Correll director C/O INTERCHANGE FINANCIAL SERVICES CORP, PARK 80 W PLAZA TWO, SADDLE BROOK NJ 07663
Anthony April Kaye Bullock officer: CEO and President, Encompass 3606 PRINCETON AVENUE, DALLAS TX 75205
Higdon Leo I Jr director 1700 LINCOLN STREET, 28TH FLOOR, DENVER CO 80203
Patricia Anne Maryland director 7342 HORIZON DRIVE, WEST PALM BEACH FL 33412
Yvonne M Curl director C/O ENHABIT, INC., 6688 N. CENTRAL EXPRESSWAY, SUITE 1300, DALLAS TX 75206
Cheryl B. Levy officer: Chief Human Resources Officer 3137 BROOK HIGHLAND DRIVE, BIRMINGHAM AL 35242