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Dover Corporation (NYSE:DOV)
Beneish M-Score
-2.46 (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 Corporation has a M-score of -2.46 suggests that the company is not a manipulator.

DOV' s 10-Year Beneish M-Score Range
Min: -3.01   Max: -2.04
Current: -2.46

-3.01
-2.04

During the past 13 years, the highest Beneish M-Score of Dover Corporation was -2.04. The lowest was -3.01. And the median was -2.61.


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 Corporation 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 * 1.0292+0.528 * 1.0021+0.404 * 0.9892+0.892 * 1.0772+0.115 * 0.8926
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.001+4.679 * -0.0144-0.327 * 0.9726
=-2.46

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,359 Mil.
Revenue was 2209.128 + 2252.349 + 2228.763 + 2039.573 = $8,730 Mil.
Gross Profit was 830.557 + 876.65 + 855.952 + 776.622 = $3,340 Mil.
Total Current Assets was $3,240 Mil.
Total Assets was $10,838 Mil.
Property, Plant and Equipment(Net PPE) was $1,183 Mil.
Depreciation, Depletion and Amortization(DDA) was $422 Mil.
Selling, General & Admin. Expense(SGA) was $1,986 Mil.
Total Current Liabilities was $1,616 Mil.
Long-Term Debt was $2,599 Mil.
Net Income was 193.963 + 269.114 + 330.049 + 210.003 = $1,003 Mil.
Non Operating Income was 3.016 + -0.97 + -2.543 + 4.719 = $4 Mil.
Cash Flow from Operations was 422.961 + 349.016 + 305.675 + 76.865 = $1,155 Mil.
Accounts Receivable was $1,226 Mil.
Revenue was 2013.831 + 2097.605 + 2038.289 + 1954.614 = $8,104 Mil.
Gross Profit was 773.744 + 810.139 + 777.102 + 746.08 = $3,107 Mil.
Total Current Assets was $3,028 Mil.
Total Assets was $10,444 Mil.
Property, Plant and Equipment(Net PPE) was $1,167 Mil.
Depreciation, Depletion and Amortization(DDA) was $358 Mil.
Selling, General & Admin. Expense(SGA) was $1,842 Mil.
Total Current Liabilities was $1,987 Mil.
Long-Term Debt was $2,189 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)
=(1359.101 / 8729.813) / (1225.898 / 8104.339)
=0.15568501 / 0.1512644
=1.0292

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)
=(876.65 / 8104.339) / (830.557 / 8729.813)
=0.3833829 / 0.38257188
=1.0021

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 - (3240.162 + 1182.982) / 10838.172) / (1 - (3027.844 + 1167.052) / 10443.943)
=0.59189206 / 0.59834174
=0.9892

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
=8729.813 / 8104.339
=1.0772

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))
=(357.585 / (357.585 + 1167.052)) / (421.616 / (421.616 + 1182.982))
=0.23453779 / 0.26275491
=0.8926

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)
=(1985.849 / 8729.813) / (1841.688 / 8104.339)
=0.22747898 / 0.22724716
=1.001

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)
=((2599.201 + 1615.58) / 10838.172) / ((2189.35 + 1986.628) / 10443.943)
=0.38888301 / 0.39984688
=0.9726

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
=(1003.129 - 4.222 - 1154.517) / 10838.172
=-0.0144

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 Corporation has a M-score of -2.46 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.

Dover Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.14630.85260.99280.92960.87611.13661.17010.85280.99631.0292
GMI 0.96371.00210.9781.00531.00590.99240.91661.02721.00691.0021
AQI 1.03391.22550.94630.95750.97021.03220.90491.06881.07630.9892
SGI 1.0151.14631.23261.14171.04740.76311.05781.20621.09981.0772
DEPI 1.11730.89710.89730.89830.9350.97021.11530.92460.9820.8926
SGAI 0.96370.98050.96681.01890.98941.16440.93820.95140.97311.001
LVGI 0.96081.03931.0311.01531.01020.90020.98341.00421.14210.9726
TATA -0.032-0.0299-0.0422-0.026-0.054-0.0563-0.0279-0.0196-0.0436-0.0144
M-score -2.45-2.55-2.53-2.57-2.82-2.82-2.46-2.48-2.61-2.46

Dover Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.0770.87350.90650.8840.98640.99630.9430.95520.89611.0292
GMI 0.97591.01671.0281.03551.02211.00691.00040.99320.99781.0021
AQI 1.04081.06881.06981.11271.01351.07631.08521.0591.05280.9892
SGI 1.05281.17761.1581.12851.06861.09981.09021.10921.13581.0772
DEPI 1.06730.92460.91720.86510.92910.9820.89020.89620.87160.8926
SGAI 0.97770.9540.94320.96280.95530.97310.99750.9910.99721.001
LVGI 1.02051.00420.94770.9680.95861.14211.1551.14251.12760.9726
TATA -0.0344-0.0196-0.0201-0.028-0.0111-0.0436-0.038-0.0311-0.0326-0.0144
M-score -2.51-2.50-2.46-2.54-2.45-2.61-2.66-2.61-2.64-2.46
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