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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-3.15 (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.

Keurig Green Mountain Inc has a M-score of -3.27 suggests that the company is not a manipulator.

GMCR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.35   Max: -0.72
Current: -3.15

-3.35
-0.72

During the past 13 years, the highest Beneish M-Score of Keurig Green Mountain Inc was -0.72. The lowest was -3.35. And the median was -2.35.


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 Keurig Green Mountain Inc 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 * 0.9458+0.528 * 1.1174+0.404 * 1.061+0.892 * 0.9554+0.115 * 0.9742
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9558+4.679 * -0.1451-0.327 * 1.353
=-3.27

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $581 Mil.
Revenue was 1258.421 + 0 + 969.525 + 1127.184 = $3,355 Mil.
Gross Profit was 359.997 + 0 + 349.26 + 458.808 = $1,168 Mil.
Total Current Assets was $1,512 Mil.
Total Assets was $3,931 Mil.
Property, Plant and Equipment(Net PPE) was $1,265 Mil.
Depreciation, Depletion and Amortization(DDA) was $277 Mil.
Selling, General & Admin. Expense(SGA) was $601 Mil.
Total Current Liabilities was $579 Mil.
Long-Term Debt was $597 Mil.
Net Income was 104.497 + 0 + 113.621 + 155.479 = $374 Mil.
Non Operating Income was 0.363 + 0 + 1.889 + -5.065 = $-3 Mil.
Cash Flow from Operations was 334.33 + 144.76 + 242.137 + 225.557 = $947 Mil.
Accounts Receivable was $643 Mil.
Revenue was 1386.358 + 0 + 1022.371 + 1103.072 = $3,512 Mil.
Gross Profit was 464.122 + 0 + 444.592 + 457.432 = $1,366 Mil.
Total Current Assets was $2,231 Mil.
Total Assets was $4,776 Mil.
Property, Plant and Equipment(Net PPE) was $1,223 Mil.
Depreciation, Depletion and Amortization(DDA) was $260 Mil.
Selling, General & Admin. Expense(SGA) was $658 Mil.
Total Current Liabilities was $805 Mil.
Long-Term Debt was $251 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)
=(581.054 / 3355.13) / (643.029 / 3511.801)
=0.17318375 / 0.18310519
=0.9458

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)
=(0 / 3511.801) / (359.997 / 3355.13)
=0.38901578 / 0.34814299
=1.1174

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 - (1511.924 + 1264.509) / 3931.453) / (1 - (2230.817 + 1222.569) / 4775.865)
=0.2937896 / 0.27690879
=1.061

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
=3355.13 / 3511.801
=0.9554

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))
=(259.65 / (259.65 + 1222.569)) / (277.221 / (277.221 + 1264.509))
=0.17517654 / 0.17981164
=0.9742

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)
=(601.235 / 3355.13) / (658.386 / 3511.801)
=0.17919872 / 0.18747816
=0.9558

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)
=((597.245 + 579.47) / 3931.453) / ((251.077 + 805.438) / 4775.865)
=0.29930791 / 0.22121961
=1.353

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
=(373.597 - -2.813 - 946.784) / 3931.453
=-0.1451

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.

Keurig Green Mountain Inc has a M-score of -3.27 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.

Keurig Green Mountain Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.30280.86350.95021.06361.08970.92230.80521.13921.22930.868
GMI 0.96880.94861.08531.13280.99470.91961.03750.88520.96331.0846
AQI 3.82130.83770.71880.57082.61191.03410.8020.89420.73781.2095
SGI 1.39491.51631.46431.57141.72591.95381.45581.12931.08020.9601
DEPI 0.8290.85511.18631.07910.99840.89351.01660.85511.04651.0581
SGAI 1.11571.06710.88810.71921.09390.95540.89821.07980.94140.9914
LVGI 1.98970.91840.98770.44641.70660.78260.87970.76891.03511.1443
TATA -0.0155-0.06440.05760.02040.05990.0648-0.0402-0.0921-0.0233-0.0609
M-score -1.16-2.54-1.87-1.68-1.07-1.36-2.44-2.73-2.43-2.83

Keurig Green Mountain Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.13161.11781.2791.08061.25191.1711.19061.16360.84040.9458
GMI 0.87230.87370.92090.96440.96440.98490.99411.06491.06491.1174
AQI 0.89420.87670.73580.74580.73780.83991.12421.23461.20951.061
SGI 1.13681.08571.07591.06081.06081.04561.02290.99170.99170.9554
DEPI 0.85510.90210.93421.03941.04651.0821.15621.13521.05810.9742
SGAI 1.09011.0510.9830.93350.93350.96171.01931.01351.01350.9558
LVGI 0.76890.80450.80950.94151.03511.03181.4761.15921.14431.353
TATA -0.125-0.1008-0.09-0.0922-0.0542-0.028-0.0109-0.0234-0.0856-0.1451
M-score -2.89-2.84-2.67-2.87-2.57-2.48-2.43-2.36-2.96-3.27
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