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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

DHR' s 10-Year Beneish M-Score Range
Min: -3   Max: -2.23
Current: -2.82

-3
-2.23

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.23. The lowest was -3.00. And the median was -2.55.


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 * 1.0508+0.528 * 0.995+0.404 * 0.977+0.892 * 1.0533+0.115 * 0.9865
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9932+4.679 * -0.102-0.327 * 0.8377
=-2.82

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $3,632 Mil.
Revenue was 4963.6 + 4662.7 + 5266.7 + 4669.1 = $19,562 Mil.
Gross Profit was 2620.2 + 2452.9 + 2711.7 + 2424.7 = $10,210 Mil.
Total Current Assets was $9,507 Mil.
Total Assets was $35,652 Mil.
Property, Plant and Equipment(Net PPE) was $2,232 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,580 Mil.
Selling, General & Admin. Expense(SGA) was $5,540 Mil.
Total Current Liabilities was $4,407 Mil.
Long-Term Debt was $3,020 Mil.
Net Income was 676.4 + 579.7 + 789.3 + 597 = $2,642 Mil.
Non Operating Income was 19.2 + 0 + 201.5 + 0 = $221 Mil.
Cash Flow from Operations was 991.7 + 511.2 + 3585.3 + 971.4 = $6,060 Mil.
Accounts Receivable was $3,281 Mil.
Revenue was 4737.5 + 4444.7 + 4975.2 + 4415.5 = $18,573 Mil.
Gross Profit was 2495.5 + 2325.7 + 2545.3 + 2278 = $9,645 Mil.
Total Current Assets was $8,231 Mil.
Total Assets was $33,109 Mil.
Property, Plant and Equipment(Net PPE) was $2,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,487 Mil.
Selling, General & Admin. Expense(SGA) was $5,296 Mil.
Total Current Liabilities was $4,133 Mil.
Long-Term Debt was $4,101 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)
=(3631.8 / 19562.1) / (3281.4 / 18572.9)
=0.18565491 / 0.17667677
=1.0508

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)
=(2452.9 / 18572.9) / (2620.2 / 19562.1)
=0.51927809 / 0.52190205
=0.995

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 - (9507.3 + 2232.1) / 35652.1) / (1 - (8231 + 2148.9) / 33109)
=0.67072346 / 0.6864931
=0.977

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
=19562.1 / 18572.9
=1.0533

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))
=(1486.8 / (1486.8 + 2148.9)) / (1580.4 / (1580.4 + 2232.1))
=0.40894463 / 0.41453115
=0.9865

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)
=(5539.8 / 19562.1) / (5295.8 / 18572.9)
=0.28319046 / 0.28513587
=0.9932

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)
=((3020 + 4406.7) / 35652.1) / ((4100.9 + 4132.5) / 33109)
=0.20831031 / 0.24867559
=0.8377

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
=(2642.4 - 220.7 - 6059.6) / 35652.1
=-0.102

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 -2.82 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.08971.00090.97741.02960.82911.14861.03171.0720.9441.009
GMI 0.96230.97090.97540.96980.97730.9910.92511.00420.98570.9898
AQI 1.15921.05151.11451.05930.98930.96851.01961.04640.97810.9556
SGI 1.30141.14261.20261.16481.15160.88091.1221.28211.13491.047
DEPI 1.09930.9050.9541.02030.8321.01860.92081.07650.82370.9779
SGAI 1.04880.86651.06331.02471.07071.08261.00670.99730.99081.0015
LVGI 0.95220.92651.11240.94940.84070.95180.95051.14270.92030.8
TATA -0.0348-0.0329-0.0343-0.0158-0.031-0.0331-0.0262-0.0141-0.031-0.0381
M-score -2.23-2.46-2.50-2.36-2.64-2.62-2.49-2.24-2.57-2.57

Danaher Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.01220.73790.80950.94840.97281.02961.08051.0091.05751.0508
GMI 1.03041.04391.01250.98410.97790.9720.98220.98980.9910.995
AQI 1.04841.00040.98960.97810.9660.95130.97410.95560.96810.977
SGI 1.33941.35291.22621.12951.06971.031.04581.0471.05151.0533
DEPI 1.01620.74080.84210.76610.80640.81220.81640.98150.98530.9865
SGAI 0.98790.96280.96120.99390.99931.01221.01011.00150.99650.9932
LVGI 1.10890.83050.83830.92030.88950.87320.8420.80.85940.8377
TATA -0.052-0.0494-0.0573-0.1104-0.1164-0.1104-0.1072-0.1104-0.1023-0.102
M-score -2.41-2.58-2.68-2.95-3.00-2.96-2.86-2.91-2.83-2.82
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