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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.61 (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 -2.61 suggests that the company is not a manipulator.

DHR' s 10-Year Beneish M-Score Range
Min: -2.87   Max: -2.23
Current: -2.61

-2.87
-2.23

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.23. The lowest was -2.87. And the median was -2.51.


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 * 1.0107+0.528 * 0.9933+0.404 * 1.018+0.892 * 1.0416+0.115 * 0.9645
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0067+4.679 * -0.0356-0.327 * 1.0354
=-2.61

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $3,634 Mil.
Revenue was 5417.2 + 4870.3 + 4963.6 + 4662.7 = $19,914 Mil.
Gross Profit was 2803.7 + 2565.7 + 2620.2 + 2452.9 = $10,443 Mil.
Total Current Assets was $9,431 Mil.
Total Assets was $36,992 Mil.
Property, Plant and Equipment(Net PPE) was $2,203 Mil.
Depreciation, Depletion and Amortization(DDA) was $939 Mil.
Selling, General & Admin. Expense(SGA) was $5,697 Mil.
Total Current Liabilities was $5,396 Mil.
Long-Term Debt was $3,402 Mil.
Net Income was 661.7 + 680.6 + 676.4 + 579.7 = $2,598 Mil.
Non Operating Income was 99.1 + 38.2 + 19.2 + 0 = $157 Mil.
Cash Flow from Operations was 1239.4 + 1016.1 + 991.7 + 511.2 = $3,758 Mil.
Accounts Receivable was $3,452 Mil.
Revenue was 5266.7 + 4669.1 + 4737.5 + 4444.7 = $19,118 Mil.
Gross Profit was 2711.7 + 2424.7 + 2495.5 + 2325.7 = $9,958 Mil.
Total Current Assets was $9,114 Mil.
Total Assets was $34,672 Mil.
Property, Plant and Equipment(Net PPE) was $2,211 Mil.
Depreciation, Depletion and Amortization(DDA) was $895 Mil.
Selling, General & Admin. Expense(SGA) was $5,433 Mil.
Total Current Liabilities was $4,527 Mil.
Long-Term Debt was $3,437 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)
=(3633.8 / 19913.8) / (3451.6 / 19118)
=0.18247647 / 0.1805419
=1.0107

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)
=(2565.7 / 19118) / (2803.7 / 19913.8)
=0.52084946 / 0.5243851
=0.9933

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 - (9431.3 + 2203) / 36991.7) / (1 - (9113.7 + 2211.3) / 34672.2)
=0.68548891 / 0.67336944
=1.018

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
=19913.8 / 19118
=1.0416

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))
=(895 / (895 + 2211.3)) / (938.5 / (938.5 + 2203))
=0.28812413 / 0.29874264
=0.9645

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)
=(5697 / 19913.8) / (5432.8 / 19118)
=0.28608302 / 0.28417198
=1.0067

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)
=((3401.5 + 5396.4) / 36991.7) / ((3436.7 + 4527.4) / 34672.2)
=0.23783443 / 0.22969699
=1.0354

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
=(2598.4 - 156.5 - 3758.4) / 36991.7
=-0.0356

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 -2.61 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00090.97741.02960.82911.14861.03171.0720.9441.0091.0107
GMI 0.97090.97540.96980.97730.9910.92511.00420.98570.98980.9933
AQI 1.05151.11451.05930.98930.96851.01961.04640.97810.95561.018
SGI 1.14261.20261.16481.15160.88091.1221.28211.13491.0471.0416
DEPI 0.9050.9541.02030.8321.01860.92081.07640.82380.97790.9645
SGAI 0.86651.06331.02471.07071.08261.00670.99730.99081.00151.0067
LVGI 0.92651.11240.94940.84070.95180.95051.14270.92030.7971.0354
TATA -0.0329-0.0343-0.0158-0.031-0.0331-0.0262-0.0141-0.031-0.0381-0.0356
M-score -2.46-2.50-2.36-2.64-2.62-2.49-2.24-2.57-2.57-2.61

Danaher Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.80530.9440.96851.02961.08051.0091.05751.05080.9881.0107
GMI 1.01430.98570.97940.9720.98220.98980.9910.9950.9930.9933
AQI 0.98960.97810.9660.95130.97410.95560.96810.9770.94351.018
SGI 1.23251.13491.07451.031.04581.0471.05151.05331.04981.0416
DEPI 0.70480.82380.89640.99010.99140.97790.98490.98550.95420.9645
SGAI 0.95790.99080.99641.01221.01011.00150.99650.99320.9991.0067
LVGI 0.83830.92030.88950.87320.8420.7970.85940.83770.91341.0354
TATA -0.0351-0.031-0.0359-0.0314-0.0297-0.0381-0.0308-0.0317-0.0318-0.0356
M-score -2.59-2.57-2.61-2.57-2.47-2.57-2.50-2.49-2.60-2.61
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