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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

GMCR' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -0.72
Current: -2.67

-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 -2.33.


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 * 1.114+0.528 * 0.8859+0.404 * 0.8767+0.892 * 1.0905+0.115 * 0.9021
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0502+4.679 * -0.0672-0.327 * 0.8045
=-2.67

* 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 $540 Mil.
Revenue was 1386.67 + 1047.177 + 967.072 + 1004.792 = $4,406 Mil.
Gross Profit was 464.047 + 377.459 + 407.618 + 415.146 = $1,664 Mil.
Total Current Assets was $1,471 Mil.
Total Assets was $3,680 Mil.
Property, Plant and Equipment(Net PPE) was $996 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $855 Mil.
Total Current Liabilities was $546 Mil.
Long-Term Debt was $243 Mil.
Net Income was 138.227 + 126.956 + 116.272 + 132.421 = $514 Mil.
Non Operating Income was -5.56 + 3.363 + -5.735 + -2.417 = $-10 Mil.
Cash Flow from Operations was 272.676 + 63.734 + 167.55 + 267.543 = $772 Mil.
Accounts Receivable was $445 Mil.
Revenue was 1339.059 + 946.736 + 869.194 + 885.052 = $4,040 Mil.
Gross Profit was 419.163 + 316.446 + 303.311 + 313.038 = $1,352 Mil.
Total Current Assets was $1,226 Mil.
Total Assets was $3,519 Mil.
Property, Plant and Equipment(Net PPE) was $969 Mil.
Depreciation, Depletion and Amortization(DDA) was $200 Mil.
Selling, General & Admin. Expense(SGA) was $746 Mil.
Total Current Liabilities was $535 Mil.
Long-Term Debt was $403 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)
=(540.134 / 4405.711) / (444.608 / 4040.041)
=0.1225986 / 0.11005037
=1.114

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)
=(377.459 / 4040.041) / (464.047 / 4405.711)
=0.33463967 / 0.37775288
=0.8859

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 - (1470.6 + 996.246) / 3680.108) / (1 - (1226.41 + 969.297) / 3519.04)
=0.32968109 / 0.37604943
=0.8767

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
=4405.711 / 4040.041
=1.0905

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))
=(199.928 / (199.928 + 969.297)) / (232.996 / (232.996 + 996.246))
=0.1709919 / 0.18954445
=0.9021

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)
=(854.858 / 4405.711) / (746.459 / 4040.041)
=0.19403406 / 0.1847652
=1.0502

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)
=((243.469 + 545.542) / 3680.108) / ((402.921 + 534.865) / 3519.04)
=0.21439887 / 0.26648916
=0.8045

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
=(513.876 - -10.349 - 771.503) / 3680.108
=-0.0672

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 -2.67 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.90111.02211.32950.84610.95021.06361.12360.94720.82931.0708
GMI 1.0671.11570.96880.94861.08531.13280.99470.91961.03750.8852
AQI 0.6610.83083.82130.83770.71880.57082.61191.03410.8020.8942
SGI 1.17751.17531.39491.51631.46431.57141.72591.95381.45581.1293
DEPI 1.57240.8550.8290.85511.18631.07910.99840.89351.01660.8551
SGAI 0.92830.89081.11571.06710.88810.71921.09390.95540.89821.0798
LVGI 1.06990.74991.98970.91840.98770.44641.70660.78260.87970.7689
TATA -0.0892-0.059-0.0155-0.06440.05760.02040.05990.0648-0.0402-0.0921
M-score -2.88-2.50-1.14-2.56-1.87-1.68-1.04-1.34-2.42-2.79

Keurig Green Mountain Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.94720.85270.70360.7270.82930.85970.8791.04431.07081.114
GMI 0.91960.88050.9470.99221.03751.01390.96210.90990.88520.8859
AQI 1.03410.71310.70760.74950.8020.88990.89820.86670.89420.8767
SGI 1.95382.041.81661.56761.45581.24891.1981.17471.12931.0905
DEPI 0.89350.74840.97331.01281.01660.96030.85520.82150.85510.9021
SGAI 0.95540.89830.92110.93610.89820.98611.01521.04241.07981.0502
LVGI 0.78260.55320.53860.92430.87970.89050.81990.82080.76890.8045
TATA 0.06480.06020.01690.0016-0.0402-0.0902-0.0868-0.0843-0.0921-0.0672
M-score -1.34-1.45-1.93-2.29-2.42-2.81-2.84-2.75-2.79-2.67
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