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GuruFocus has detected 8 Warning Signs with Dover Corp $DOV.
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Dover Corp (NYSE:DOV)
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.

Dover Corp has a M-score of -2.59 suggests that the company is not a manipulator.

DOV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.01   Max: -2.04
Current: -2.59

-3.01
-2.04

During the past 13 years, the highest Beneish M-Score of Dover Corp was -2.04. The lowest was -3.01. And the median was -2.59.


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 Dover 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 * 1.1561+0.528 * 1.0147+0.404 * 1.0499+0.892 * 0.9767+0.115 * 1.0027
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0923+4.679 * -0.0452-0.327 * 1.1027
=-2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,265 Mil.
Revenue was 1777.961 + 1707.763 + 1686.345 + 1622.273 = $6,794 Mil.
Gross Profit was 619.704 + 631.788 + 631.213 + 589.264 = $2,472 Mil.
Total Current Assets was $2,589 Mil.
Total Assets was $10,116 Mil.
Property, Plant and Equipment(Net PPE) was $946 Mil.
Depreciation, Depletion and Amortization(DDA) was $361 Mil.
Selling, General & Admin. Expense(SGA) was $1,758 Mil.
Total Current Liabilities was $1,940 Mil.
Long-Term Debt was $3,207 Mil.
Net Income was 161.162 + 130.084 + 118.29 + 99.356 = $509 Mil.
Non Operating Income was 84.728 + 3.424 + 2.854 + 13.522 = $105 Mil.
Cash Flow from Operations was 289.029 + 231.665 + 207.868 + 133.413 = $862 Mil.
Accounts Receivable was $1,120 Mil.
Revenue was 1694.6 + 1787.582 + 1758.628 + 1715.501 = $6,956 Mil.
Gross Profit was 613.809 + 672.608 + 654.568 + 627.159 = $2,568 Mil.
Total Current Assets was $2,419 Mil.
Total Assets was $8,606 Mil.
Property, Plant and Equipment(Net PPE) was $854 Mil.
Depreciation, Depletion and Amortization(DDA) was $327 Mil.
Selling, General & Admin. Expense(SGA) was $1,647 Mil.
Total Current Liabilities was $1,367 Mil.
Long-Term Debt was $2,604 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)
=(1265.201 / 6794.342) / (1120.49 / 6956.311)
=0.18621391 / 0.16107532
=1.1561

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)
=(2568.144 / 6956.311) / (2471.969 / 6794.342)
=0.36918188 / 0.36382758
=1.0147

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 - (2589.191 + 945.67) / 10115.991) / (1 - (2419.01 + 854.269) / 8606.076)
=0.65056701 / 0.61965488
=1.0499

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
=6794.342 / 6956.311
=0.9767

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))
=(327.089 / (327.089 + 854.269)) / (360.739 / (360.739 + 945.67))
=0.27687543 / 0.27613022
=1.0027

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)
=(1757.523 / 6794.342) / (1647.382 / 6956.311)
=0.2586745 / 0.23681834
=1.0923

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)
=((3206.637 + 1940.318) / 10115.991) / ((2603.655 + 1367.182) / 8606.076)
=0.50879395 / 0.46139925
=1.1027

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
=(508.892 - 104.528 - 861.975) / 10115.991
=-0.0452

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.

Dover 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 local exchange's currency.

Dover Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.92960.87611.13661.17010.85281.21840.81341.01731.05231.1561
GMI 1.00531.00590.99240.91661.02720.99151.00261.01221.03921.0147
AQI 0.95750.97021.03220.90491.06881.07631.13150.87661.04411.0499
SGI 1.14171.04740.76311.05781.20620.89921.07971.08350.89730.9767
DEPI 0.89830.9350.97021.11530.92461.39930.6310.97160.96961.0027
SGAI 1.01890.98941.16440.93820.95140.98280.98461.00391.04391.0923
LVGI 1.01531.01020.90020.98341.00421.14210.90811.3090.97081.1027
TATA -0.026-0.054-0.0563-0.0279-0.0196-0.0430.0017-0.02-0.01-0.0452
M-score -2.57-2.82-2.82-2.46-2.48-2.54-2.53-2.63-2.53-2.59

Dover Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.78811.01730.85870.85370.89851.05231.15061.12821.08361.1561
GMI 1.0171.01221.03291.04671.05081.03921.02391.00921.00671.0147
AQI 0.95640.87661.00371.00431.01791.04411.07911.10531.07771.0499
SGI 1.18151.08351.06561.03290.99260.89730.89530.91010.9270.9767
DEPI 0.52910.97160.93580.94140.93940.96960.97860.95410.93381.0027
SGAI 0.99391.00391.01091.01951.03081.04391.05111.07781.09331.0923
LVGI 1.12131.3091.04551.04171.03780.97081.02531.04331.0551.1027
TATA -0.0012-0.02-0.0312-0.0109-0.0056-0.01-0.0231-0.0471-0.0551-0.0452
M-score -2.62-2.63-2.70-2.63-2.60-2.53-2.52-2.65-2.73-2.59
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