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Danaher Corp (NYSE:DHR)
Beneish M-Score
-2.59 (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 -2.59 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: -2.59

-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 * 1.055+0.528 * 1+0.404 * 1.119+0.892 * 1.0645+0.115 * 1.1106
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0276+4.679 * -0.0153-0.327 * 1.631
=-2.59

* 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 $1,114 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 4873.3 + 5417.2 + 4870.3 + 4963.6 = $20,124 Mil.
Gross Profit was 2600 + 2803.7 + 2565.7 + 2620.2 = $10,590 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 $961 Mil.
Selling, General & Admin. Expense(SGA) was $5,833 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 / 20124.4)
=0.1807072 / 0.17127964
=1.055

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 / 20124.4) / (2862.6 / 21422.5)
=0.52620699 / 0.5262271
=1

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 / 20124.4
=1.0645

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))
=(961.2 / (961.2 + 2135.9)) / (1114 / (1114 + 2872.5))
=0.31035485 / 0.27944312
=1.1106

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) / (5833.1 / 20124.4)
=0.29784572 / 0.28985212
=1.0276

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 -2.59 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 0.9781.04370.82911.14860.98071.12780.9441.0091.01071.0565
GMI 0.97570.96720.97730.9910.94050.98770.98570.98980.99331.0019
AQI 1.11451.05930.98930.96851.01961.04640.97810.95561.0181.1363
SGI 1.20181.1491.15160.88091.18041.21871.13491.0471.04161.0326
DEPI 0.95631.0260.8321.01860.92081.07650.82370.97790.96451.1017
SGAI 1.04850.86121.07071.08260.97561.02910.99081.00151.00671.0292
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 -2.49-2.33-2.64-2.62-2.47-2.26-2.57-2.57-2.61-2.57

Danaher Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0091.05751.05080.9881.01070.95510.94651.07961.0391.055
GMI 0.98980.9910.9950.9930.99330.99120.98680.99120.99581
AQI 0.95560.96810.9770.94351.0181.04211.01461.16121.13631.119
SGI 1.0471.05151.05331.04981.04161.04081.03711.03431.051.0645
DEPI 0.97790.98490.98540.95420.96450.94290.93851.16641.10171.1106
SGAI 1.00150.99650.99320.9991.00671.02181.03091.04811.03761.0276
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 -2.57-2.50-2.49-2.60-2.61-2.66-2.70-2.67-2.58-2.59
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