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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

DHR' s Beneish M-Score Range Over the Past 10 Years
Min: -2.89   Max: -2.12
Current: -2.69

-2.89
-2.12

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.12. The lowest was -2.89. And the median was -2.53.


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 * 1.0295+0.528 * 1.0013+0.404 * 1.0695+0.892 * 1.0884+0.115 * 1.0399
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0355+4.679 * -0.0188-0.327 * 1.7743
=-2.69

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $3,995 Mil.
Revenue was 5785 + 5387.2 + 5884.8 + 5023.4 = $22,080 Mil.
Gross Profit was 3149.4 + 2862.6 + 3013.3 + 2637 = $11,662 Mil.
Total Current Assets was $11,231 Mil.
Total Assets was $51,504 Mil.
Property, Plant and Equipment(Net PPE) was $2,785 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,187 Mil.
Selling, General & Admin. Expense(SGA) was $6,675 Mil.
Total Current Liabilities was $8,026 Mil.
Long-Term Debt was $12,008 Mil.
Net Income was 656.7 + 758.4 + 688.6 + 1403.3 = $3,507 Mil.
Non Operating Income was 0 + 223.4 + 0 + 12.4 = $236 Mil.
Cash Flow from Operations was 1281.8 + 772.8 + 1231.6 + 952.6 = $4,239 Mil.
Accounts Receivable was $3,565 Mil.
Revenue was 5127.1 + 4873.3 + 5417.2 + 4870.3 = $20,288 Mil.
Gross Profit was 2760.2 + 2600 + 2803.7 + 2565.7 = $10,730 Mil.
Total Current Assets was $9,655 Mil.
Total Assets was $36,987 Mil.
Property, Plant and Equipment(Net PPE) was $2,161 Mil.
Depreciation, Depletion and Amortization(DDA) was $974 Mil.
Selling, General & Admin. Expense(SGA) was $5,923 Mil.
Total Current Liabilities was $5,056 Mil.
Long-Term Debt was $3,053 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)
=(3994.8 / 22080.4) / (3565.2 / 20287.9)
=0.18092064 / 0.17573036
=1.0295

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)
=(10729.6 / 20287.9) / (11662.3 / 22080.4)
=0.52886696 / 0.52817431
=1.0013

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 - (11231 + 2784.8) / 51503.7) / (1 - (9654.5 + 2161.3) / 36986.8)
=0.72786809 / 0.68054008
=1.0695

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
=22080.4 / 20287.9
=1.0884

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))
=(974.1 / (974.1 + 2161.3)) / (1186.5 / (1186.5 + 2784.8))
=0.31067806 / 0.29876867
=1.0399

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)
=(6674.7 / 22080.4) / (5922.8 / 20287.9)
=0.30229072 / 0.29193756
=1.0355

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)
=((12007.7 + 8025.9) / 51503.7) / ((3052.7 + 5055.6) / 36986.8)
=0.388974 / 0.21922145
=1.7743

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
=(3507 - 235.8 - 4238.8) / 51503.7
=-0.0188

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 -2.69 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 0.97741.02960.82911.14860.98071.12780.9441.0091.01071.0565
GMI 0.97540.96980.97730.9910.94050.98770.98570.98980.99331.0019
AQI 1.11451.05930.98930.96851.01961.04640.97810.95561.0181.1363
SGI 1.20261.16481.15160.88091.18041.21871.13491.0471.04161.0326
DEPI 0.9541.02030.8321.01860.92081.07650.82370.97790.96451.1017
SGAI 1.06331.02471.07071.08260.97561.02910.99081.00151.00671.0292
LVGI 1.11240.94940.84070.95180.95051.14270.92030.7971.03541.5865
TATA -0.0331-0.0158-0.031-0.0331-0.0262-0.0141-0.031-0.0381-0.0356-0.0095
M-score -2.49-2.36-2.64-2.62-2.47-2.26-2.57-2.57-2.61-2.57

Danaher Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.05751.05080.9881.01070.95510.94651.07961.0391.0551.0295
GMI 0.9910.9950.9930.99330.99120.98680.99120.995811.0013
AQI 0.96810.9770.94351.0181.04211.01461.16121.13631.1191.0695
SGI 1.05151.05331.04981.04161.04081.03711.03431.051.06451.0884
DEPI 0.98490.98540.95420.96450.94290.93851.16641.10171.11061.0399
SGAI 0.99650.99320.9991.00671.02181.03091.04811.03761.02761.0355
LVGI 0.85940.83770.91341.03541.00661.05241.93711.58651.6311.7743
TATA -0.0308-0.0317-0.0318-0.0356-0.0371-0.0379-0.0119-0.0095-0.0153-0.0188
M-score -2.50-2.49-2.60-2.61-2.66-2.70-2.67-2.58-2.59-2.69
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