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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.68 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Danaher Corp has a M-score of -2.68 suggests that the company is not a manipulator.

DHR' s Beneish M-Score Range Over the Past 10 Years
Min: -2.87   Max: -2.13
Current: -2.68

-2.87
-2.13

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.13. The lowest was -2.87. And the median was -2.50.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Danaher Corp 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 * 1.0418+0.528 * 0.9788+0.404 * 1.1612+0.892 * 1.0718+0.115 * 1.1043
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0624+4.679 * -0.0119-0.327 * 1.9371
=-2.68

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $3,906 Mil.
Revenue was 5023.4 + 5127.1 + 4873.3 + 5984 = $21,008 Mil.
Gross Profit was 2637 + 2760.2 + 2600 + 3212.3 = $11,210 Mil.
Total Current Assets was $8,932 Mil.
Total Assets was $49,708 Mil.
Property, Plant and Equipment(Net PPE) was $2,792 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,010 Mil.
Selling, General & Admin. Expense(SGA) was $6,302 Mil.
Total Current Liabilities was $8,626 Mil.
Long-Term Debt was $11,523 Mil.
Net Income was 1403.3 + 695.6 + 569.8 + 661.7 = $3,330 Mil.
Non Operating Income was 12.4 + 0 + 0 + 99.1 = $112 Mil.
Cash Flow from Operations was 952.6 + 1094 + 523.6 + 1239.4 = $3,810 Mil.
Accounts Receivable was $3,498 Mil.
Revenue was 4707.1 + 4963.6 + 4662.7 + 5266.7 = $19,600 Mil.
Gross Profit was 2452.3 + 2620.2 + 2452.9 + 2711.7 = $10,237 Mil.
Total Current Assets was $9,990 Mil.
Total Assets was $35,536 Mil.
Property, Plant and Equipment(Net PPE) was $2,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $898 Mil.
Selling, General & Admin. Expense(SGA) was $5,535 Mil.
Total Current Liabilities was $4,471 Mil.
Long-Term Debt was $2,965 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(3906.1 / 21007.8) / (3498.1 / 19600.1)
=0.1859357 / 0.17847358
=1.0418

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)
=(2760.2 / 19600.1) / (2637 / 21007.8)
=0.52229836 / 0.53358752
=0.9788

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8931.8 + 2791.6) / 49707.9) / (1 - (9989.5 + 2161.6) / 35535.9)
=0.76415419 / 0.65806128
=1.1612

4. SGI = Sales Growth Index

Ratio of sales 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
=21007.8 / 19600.1
=1.0718

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(897.8 / (897.8 + 2161.6)) / (1010.3 / (1010.3 + 2791.6))
=0.29345623 / 0.26573555
=1.1043

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(6302.1 / 21007.8) / (5534.6 / 19600.1)
=0.29998858 / 0.28237611
=1.0624

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((11522.7 + 8625.6) / 49707.9) / ((2964.7 + 4471.1) / 35535.9)
=0.40533396 / 0.20924755
=1.9371

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
=(3330.4 - 111.5 - 3809.6) / 49707.9
=-0.0119

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Danaher Corp has a M-score of -2.68 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Danaher Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97741.02960.82911.14861.0720.9441.0091.01071.0565
GMI 0.97540.96980.97730.9911.00420.98570.98980.99331.0019
AQI 1.11451.05930.98930.96851.04640.97810.95561.0181.1363
SGI 1.20261.16481.15160.88091.28211.13491.0471.04161.0326
DEPI 0.9541.02030.8321.018600.82380.97790.96451.1017
SGAI 1.06331.02471.07071.08260.99730.99081.00151.00671.0292
LVGI 1.11240.94940.84070.95181.14270.92030.7971.03541.5865
TATA -0.0343-0.0158-0.031-0.0331-0.0141-0.031-0.0381-0.0356-0.0095
M-score -2.50-2.36-2.64-2.62-2.37-2.57-2.57-2.61-2.57

Danaher Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.08051.0091.05751.05080.99620.99060.93630.92811.04181.0601
GMI 0.98220.98980.9910.9950.99570.98550.98360.97950.97881.0036
AQI 0.97410.95560.96810.9770.94351.0181.04211.01461.16121.1363
SGI 1.04581.0471.05151.05331.04111.06271.06161.05771.07181.0291
DEPI 0.99140.97790.98490.98550.98110.96450.94290.93851.10431.1017
SGAI 1.01011.00150.99650.99320.99411.01251.02731.03621.06241.0317
LVGI 0.8420.7970.85940.83770.91341.03541.00661.05241.93711.5865
TATA -0.0297-0.0381-0.0308-0.0317-0.0318-0.0356-0.0371-0.0379-0.0119-0.0095
M-score -2.47-2.57-2.50-2.49-2.59-2.62-2.66-2.71-2.68-2.57
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