Castlight Health, inc.
CSLT Healthcare Health Information Services
Operating cash flow growth for ten consecutive years.
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Castlight Health, inc. (CSLT) Beneish M-score
Castlight Health, inc.'s Beneish M-score for fiscal 2020 is −4.14; values above −1.78 are the model's flag for possible earnings manipulation — a statistical screen, not a finding.
Beneish M-score, annual
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Annual newest first
| Period | Beneish M-score | Change (points) |
|---|---|---|
| FY2020 | −4.14 | (1.44) |
| FY2019 | −2.71 | (0.11) |
| FY2018 | −2.60 | (3.02) |
| FY2017 | 0.43 | 3.72 |
| FY2016 | −3.29 | (1.27) |
| FY2015 | −2.02 | — |
How fiscal 2020’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Days’ sales in receivables index | 0.99 | — | 0.91 | |
| Gross margin index | 0.91 | — | 0.48 | |
| Asset quality index | 0.78 | — | 0.32 | |
| Sales growth index | 1.02 | — | 0.91 | |
| Depreciation index | 0.88 | — | 0.10 | |
| SG&A index | 0.85 | — | −0.15 | |
| Total accruals to total assets | (0.34) | — | −1.59 | |
| Leverage index | 0.89 | — | −0.29 | |
| Beneish M-score | Low — no pattern the model associates with manipulation | −4.14 | ||
How the Beneish M-score works
M = −4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI (Beneish, 1999): eight changes in the accounts from one fiscal year to the next, which the model weighs for the pattern seen in companies that later restated their earnings. Higher is worse.
| below −2.22 | Low — no pattern the model associates with manipulation |
|---|---|
| −2.22 to −1.78 | Elevated |
| above −1.78 | Flagged by the model |
−1.78 is the cut-off usually quoted from the paper, −2.22 a common conservative one. A statistical screen, not a finding of wrongdoing.
When asset quality, depreciation or SG&A cannot be worked out, that index is set to 1, as Beneish did, and the breakdown says so; with all three missing there is no score. Depreciation includes amortisation, and asset quality leaves out securities. Not worked out for banks, insurers and REITs.
Beneish M-score against peers
| Company | Beneish M-score |
|---|---|
| EVH Evolent Health, Inc compare | −4.6× |
| CSLT Castlight Health, inc. | −4.1× |
| AMWL American Well Corporation compare | −3.3× |
| WEAV Weave Communications, Inc. compare | −3.2× |
| NRC National Research Corporation compare | −3.1× |
| SY So-Young International Inc. Sponsored ADR compare | −3.0× |
| SPOK Spok Holdings, Inc. compare | −2.8× |
| CTEV Claritev Corporation compare | −2.6× |
| CARL Carlsmed, Inc. compare | −1.8× |
What Beneish M-score is
The Beneish M-Score combines eight year-on-year changes in the accounts into a statistical screen for patterns seen in companies that overstated earnings.
−4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI