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Dover Corp (NYSE:DOV)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

DOV' s 10-Year Beneish M-Score Range
Min: -3.52   Max: -1.99
Current: -2.71

-3.52
-1.99

During the past 13 years, the highest Beneish M-Score of Dover Corp was -1.99. The lowest was -3.52. And the median was -2.62.


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 * 0.9269+0.528 * 1.0066+0.404 * 0.9564+0.892 * 1.0046+0.115 * 0.8766
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9966+4.679 * -0.0205-0.327 * 1.1213
=-2.71

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,339 Mil.
Revenue was 2092.467 + 2047.738 + 1884.647 + 2209.128 = $8,234 Mil.
Gross Profit was 801.842 + 796.417 + 736.209 + 830.557 = $3,165 Mil.
Total Current Assets was $3,116 Mil.
Total Assets was $8,959 Mil.
Property, Plant and Equipment(Net PPE) was $819 Mil.
Depreciation, Depletion and Amortization(DDA) was $343 Mil.
Selling, General & Admin. Expense(SGA) was $1,865 Mil.
Total Current Liabilities was $1,394 Mil.
Long-Term Debt was $2,570 Mil.
Net Income was 231.844 + 213.959 + 160.138 + 193.963 = $800 Mil.
Non Operating Income was 0.803 + 6.042 + -0.356 + 3.016 = $10 Mil.
Cash Flow from Operations was 290.243 + 276.785 + -16.164 + 422.961 = $974 Mil.
Accounts Receivable was $1,438 Mil.
Revenue was 2252.349 + 2228.763 + 2039.573 + 1675.768 = $8,196 Mil.
Gross Profit was 876.65 + 855.952 + 776.622 + 662.214 = $3,171 Mil.
Total Current Assets was $3,263 Mil.
Total Assets was $10,665 Mil.
Property, Plant and Equipment(Net PPE) was $1,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $401 Mil.
Selling, General & Admin. Expense(SGA) was $1,863 Mil.
Total Current Liabilities was $2,019 Mil.
Long-Term Debt was $2,190 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)
=(1338.586 / 8233.98) / (1437.513 / 8196.453)
=0.16256853 / 0.17538233
=0.9269

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)
=(796.417 / 8196.453) / (801.842 / 8233.98)
=0.3869281 / 0.3843858
=1.0066

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 - (3116.331 + 818.73) / 8959.186) / (1 - (3263.17 + 1148.784) / 10665.13)
=0.56077918 / 0.58631972
=0.9564

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
=8233.98 / 8196.453
=1.0046

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))
=(401.336 / (401.336 + 1148.784)) / (343.193 / (343.193 + 818.73))
=0.25890641 / 0.29536639
=0.8766

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)
=(1864.622 / 8233.98) / (1862.518 / 8196.453)
=0.22645452 / 0.22723463
=0.9966

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)
=((2570.257 + 1393.964) / 8959.186) / ((2190.156 + 2018.537) / 10665.13)
=0.44247558 / 0.39462182
=1.1213

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
=(799.904 - 9.505 - 973.825) / 8959.186
=-0.0205

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 -2.71 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 Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98180.98090.9950.9360.88121.13661.00230.98181.01031.0292
GMI 0.99811.0090.94870.99391.00590.99240.94860.99821.00111.0021
AQI 0.99661.15451.02550.97490.96841.03220.90491.03271.1140.9892
SGI 1.24351.10761.07131.10971.04740.76311.23491.11461.01941.0772
DEPI 0.9930.990.930.87820.94080.97020.98721.0350.99120.8926
SGAI 0.95760.9710.97231.02960.98941.16440.90980.97270.98151.001
LVGI 0.97631.06610.98441.0161.01430.90020.98341.02321.12090.9726
TATA -0.0321-0.0276-0.0421-0.026-0.054-0.0563-0.0284-0.0192-0.0436-0.0144
M-score -2.42-2.48-2.63-2.60-2.82-2.82-2.45-2.47-2.65-2.46

Dover Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.97051.0761.03541.04981.07231.02531.02920.89120.9050.9269
GMI 0.99330.97990.99320.98890.98620.98931.00210.99810.99841.0066
AQI 1.11271.01351.1141.08521.0591.05280.98920.98440.96810.9564
SGI 1.02790.97960.99470.97930.98810.99271.07721.06121.02961.0046
DEPI 0.99620.99230.99120.91690.91970.92530.89260.75480.81580.8766
SGAI 0.99860.9970.98671.00290.98970.99221.0010.99780.99610.9966
LVGI 0.9680.95861.12091.1551.14251.12760.97261.09361.08151.1213
TATA -0.0272-0.01-0.0436-0.038-0.0311-0.0327-0.0144-0.0124-0.0231-0.0205
M-score -2.56-2.47-2.65-2.66-2.61-2.65-2.46-2.65-2.71-2.71
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