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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

DHR' s 10-Year Beneish M-Score Range
Min: -2.87   Max: -2.12
Current: -2.6

-2.87
-2.12

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.12. 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 * 0.988+0.528 * 0.993+0.404 * 0.9435+0.892 * 1.0498+0.115 * 0.9542
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.999+4.679 * -0.0318-0.327 * 0.9134
=-2.60

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $3,498 Mil.
Revenue was 4870.3 + 4963.6 + 4662.7 + 5266.7 = $19,763 Mil.
Gross Profit was 2565.7 + 2620.2 + 2452.9 + 2711.7 = $10,351 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 $934 Mil.
Selling, General & Admin. Expense(SGA) was $5,608 Mil.
Total Current Liabilities was $4,471 Mil.
Long-Term Debt was $2,965 Mil.
Net Income was 680.6 + 676.4 + 579.7 + 789.3 = $2,726 Mil.
Non Operating Income was 38.2 + 19.2 + 0 + 201.5 = $259 Mil.
Cash Flow from Operations was 1016.1 + 991.7 + 511.2 + 1078.2 = $3,597 Mil.
Accounts Receivable was $3,373 Mil.
Revenue was 4669.1 + 4737.5 + 4444.7 + 4975.178 = $18,826 Mil.
Gross Profit was 2424.7 + 2495.5 + 2325.7 + 2545.298 = $9,791 Mil.
Total Current Assets was $8,024 Mil.
Total Assets was $33,721 Mil.
Property, Plant and Equipment(Net PPE) was $2,179 Mil.
Depreciation, Depletion and Amortization(DDA) was $881 Mil.
Selling, General & Admin. Expense(SGA) was $5,348 Mil.
Total Current Liabilities was $4,279 Mil.
Long-Term Debt was $3,446 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)
=(3498.1 / 19763.3) / (3372.7 / 18826.478)
=0.17699979 / 0.17914663
=0.988

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)
=(2620.2 / 18826.478) / (2565.7 / 19763.3)
=0.52007593 / 0.52372326
=0.993

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 - (9989.5 + 2161.6) / 35535.9) / (1 - (8023.7 + 2179.2) / 33721.2)
=0.65806128 / 0.69743366
=0.9435

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
=19763.3 / 18826.478
=1.0498

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))
=(881.072 / (881.072 + 2179.2)) / (934 / (934 + 2161.6))
=0.28790643 / 0.30171857
=0.9542

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)
=(5608.2 / 19763.3) / (5347.781 / 18826.478)
=0.2837684 / 0.28405637
=0.999

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)
=((2964.7 + 4471.1) / 35535.9) / ((3445.5 + 4279.4) / 33721.2)
=0.20924755 / 0.22908141
=0.9134

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
=(2726 - 258.9 - 3597.2) / 35535.9
=-0.0318

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 -2.60 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 1.08971.00090.97741.02960.82911.14860.98071.12780.9441.009
GMI 0.96230.97090.97540.96980.97730.9910.94050.98770.98570.9898
AQI 1.15921.05151.11451.05930.98930.96851.01961.04640.97810.9556
SGI 1.30141.14261.20261.16481.15160.88091.18041.21871.13491.047
DEPI 1.09930.9050.9541.02030.8321.01860.92081.07650.82370.9779
SGAI 1.04880.86651.06331.02471.07071.08260.97561.02910.99081.0015
LVGI 0.95220.92651.11240.94940.84070.95180.95051.14270.92030.797
TATA -0.0348-0.0329-0.0343-0.0158-0.031-0.0331-0.0262-0.0141-0.031-0.0381
M-score -2.23-2.46-2.50-2.36-2.64-2.62-2.47-2.26-2.57-2.57

Danaher Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.78260.8620.9440.96551.02221.06841.0091.05751.05080.988
GMI 1.02190.98970.98570.98080.97470.98670.98980.9910.9950.993
AQI 1.00040.98960.97810.9660.95130.97410.95560.96810.9770.9435
SGI 1.27561.15141.13491.07781.03741.05761.0471.05151.05331.0498
DEPI 0.56850.70910.82370.89550.98860.98920.97790.98490.98540.9542
SGAI 0.99871.00020.99080.99461.00771.00281.00150.99650.99320.999
LVGI 0.83050.83830.92030.88950.87320.8420.7970.85940.83770.9134
TATA -0.027-0.0351-0.031-0.0359-0.0314-0.0297-0.0381-0.0308-0.0317-0.0318
M-score -2.54-2.63-2.57-2.61-2.57-2.47-2.57-2.50-2.49-2.60
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