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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 Beneish M-Score Range Over the Past 10 Years
Min: -2.89   Max: -1.99
Current: -2.61

-2.89
-1.99

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -1.99. The lowest was -2.89. And the median was -2.52.


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 * 1.027+0.528 * 0.9898+0.404 * 1.119+0.892 * 1.0936+0.115 * 1.053
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0417+4.679 * -0.0153-0.327 * 1.631
=-2.61

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $3,871 Mil.
Revenue was 5387.2 + 5884.8 + 5023.4 + 5127.1 = $21,423 Mil.
Gross Profit was 2862.6 + 3013.3 + 2637 + 2760.2 = $11,273 Mil.
Total Current Assets was $7,747 Mil.
Total Assets was $48,386 Mil.
Property, Plant and Equipment(Net PPE) was $2,873 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,126 Mil.
Selling, General & Admin. Expense(SGA) was $6,381 Mil.
Total Current Liabilities was $5,321 Mil.
Long-Term Debt was $12,195 Mil.
Net Income was 758.4 + 688.6 + 1403.3 + 695.6 = $3,546 Mil.
Non Operating Income was 223.4 + 0 + 12.4 + 0 = $236 Mil.
Cash Flow from Operations was 772.8 + 1231.6 + 952.6 + 1094 = $4,051 Mil.
Accounts Receivable was $3,447 Mil.
Revenue was 4694.7 + 5224.2 + 4707.1 + 4963.6 = $19,590 Mil.
Gross Profit was 2468.2 + 2662.4 + 2452.3 + 2620.2 = $10,203 Mil.
Total Current Assets was $8,774 Mil.
Total Assets was $36,072 Mil.
Property, Plant and Equipment(Net PPE) was $2,136 Mil.
Depreciation, Depletion and Amortization(DDA) was $900 Mil.
Selling, General & Admin. Expense(SGA) was $5,601 Mil.
Total Current Liabilities was $4,953 Mil.
Long-Term Debt was $3,054 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)
=(3871.2 / 21422.5) / (3446.9 / 19589.6)
=0.1807072 / 0.17595561
=1.027

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)
=(3013.3 / 19589.6) / (2862.6 / 21422.5)
=0.52084269 / 0.5262271
=0.9898

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 - (7747.2 + 2872.5) / 48385.6) / (1 - (8774.4 + 2135.9) / 36072.3)
=0.78051941 / 0.69754354
=1.119

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
=21422.5 / 19589.6
=1.0936

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))
=(900.3 / (900.3 + 2135.9)) / (1125.9 / (1125.9 + 2872.5))
=0.29652197 / 0.28158764
=1.053

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)
=(6380.6 / 21422.5) / (5601.1 / 19589.6)
=0.29784572 / 0.28592212
=1.0417

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)
=((12194.7 + 5321.3) / 48385.6) / ((3053.8 + 4952.7) / 36072.3)
=0.36200853 / 0.22195701
=1.631

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
=(3545.9 - 235.8 - 4051) / 48385.6
=-0.0153

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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97741.02960.82911.14861.0720.9441.05510.95291.0716
GMI 0.97540.96980.97730.9911.00420.98571.0090.98930.9868
AQI 1.11451.05930.98930.96851.04640.97810.95561.01921.1349
SGI 1.20261.16481.15160.88091.28211.13491.00121.04761.0736
DEPI 0.9541.02030.8321.018600.82381.01420.95611.0715
SGAI 1.06331.02471.07071.08260.99730.99080.98641.00531.0465
LVGI 1.11240.94940.84070.95181.14270.92030.7971.03541.5865
TATA -0.0331-0.0158-0.031-0.0331-0.0141-0.031-0.0381-0.0356-0.0095
M-score -2.49-2.36-2.64-2.62-2.37-2.57-2.55-2.66-2.54

Danaher Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.05511.10531.09771.04060.93330.93880.93071.04411.08541.027
GMI 1.0091.00991.01361.01430.98090.98270.97840.97740.99260.9898
AQI 0.95560.96810.9770.94351.01921.04211.01461.16121.13491.119
SGI 1.00121.00611.00830.99671.06971.05881.05481.06951.05991.0936
DEPI 1.01421.02091.02091.01720.95610.9520.9391.1051.07151.053
SGAI 0.98640.98150.97830.97911.01171.02331.03281.06081.04491.0417
LVGI 0.7970.85940.83770.91341.03541.00661.05241.93711.58651.631
TATA -0.0381-0.0308-0.0317-0.0318-0.0356-0.0371-0.0379-0.0119-0.0095-0.0153
M-score -2.55-2.48-2.47-2.58-2.67-2.66-2.71-2.68-2.53-2.61
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