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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

DHR' s Beneish M-Score Range Over the Past 10 Years
Min: -2.89   Max: -2.13
Current: -2.7

-2.89
-2.13

During the past 13 years, the highest Beneish M-Score of Danaher Corp was -2.13. 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 * 0.9939+0.528 * 0.9886+0.404 * 1.0695+0.892 * 1.1273+0.115 * 0.9722
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0551+4.679 * -0.0188-0.327 * 1.7743
=-2.70

* 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 $1,210 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 4960.2 + 4694.7 + 5224.2 + 4707.1 = $19,586 Mil.
Gross Profit was 2644 + 2468.2 + 2662.4 + 2452.3 = $10,227 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 $902 Mil.
Selling, General & Admin. Expense(SGA) was $5,612 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 / 19586.2)
=0.18092064 / 0.18202612
=0.9939

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)
=(10226.9 / 19586.2) / (11662.3 / 22080.4)
=0.52214825 / 0.52817431
=0.9886

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 / 19586.2
=1.1273

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))
=(901.9 / (901.9 + 2161.3)) / (1209.7 / (1209.7 + 2784.8))
=0.29443066 / 0.30284141
=0.9722

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) / (5611.6 / 19586.2)
=0.30229072 / 0.28650785
=1.0551

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 -2.70 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 0.97741.02960.82911.14861.03171.0720.9441.05510.95291.0716
GMI 0.97540.96980.97730.9910.92511.00420.98571.0090.98930.9868
AQI 1.11451.05930.98930.96851.01961.04640.97810.95561.01921.1349
SGI 1.20261.16481.15160.88091.1221.28211.13491.00121.04761.0736
DEPI 0.9541.02030.8321.01860.92081.07640.82381.01420.95611.0715
SGAI 1.06331.02471.07071.08261.00670.99730.99080.98641.00531.0465
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 -2.49-2.36-2.64-2.62-2.49-2.24-2.57-2.55-2.66-2.54

Danaher Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.10531.09771.04060.93330.93880.93861.05281.09421.03510.9939
GMI 1.00991.01361.01430.98090.98270.98110.98010.99530.99230.9886
AQI 0.96810.9770.94351.01921.04211.01461.16121.13491.1191.0695
SGI 1.00611.00830.99671.06971.05881.04591.06061.05141.0851.1273
DEPI 1.02091.02091.01720.95610.9520.95591.1051.07151.0530.9722
SGAI 0.98150.97830.97911.01171.02331.02711.05541.03981.03681.0551
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 -2.48-2.47-2.58-2.67-2.66-2.70-2.68-2.53-2.61-2.70
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