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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

GMCR' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -0.72
Current: -2.34

-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 * 1.146+0.528 * 0.9792+0.404 * 0.8399+0.892 * 1.0685+0.115 * 1.082
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9628+4.679 * 0.0031-0.327 * 1.0318
=-2.34

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $643 Mil.
Revenue was 1386.358 + 1195.567 + 1022.371 + 1103.072 = $4,707 Mil.
Gross Profit was 464.122 + 449.789 + 444.592 + 457.432 = $1,816 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 $879 Mil.
Total Current Liabilities was $805 Mil.
Long-Term Debt was $251 Mil.
Net Income was 134.579 + 141.056 + 155.151 + 162.084 = $593 Mil.
Non Operating Income was -5.545 + -7.307 + 6.259 + -4.569 = $-11 Mil.
Cash Flow from Operations was 142.408 + -104.335 + 230.148 + 320.944 = $589 Mil.
Accounts Receivable was $525 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.



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)
=(643.029 / 4707.368) / (525.148 / 4405.711)
=0.13660054 / 0.11919711
=1.146

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)
=(449.789 / 4405.711) / (464.122 / 4707.368)
=0.37775288 / 0.3857644
=0.9792

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 - (2230.817 + 1222.569) / 4775.865) / (1 - (1470.6 + 996.246) / 3680.108)
=0.27690879 / 0.32968109
=0.8399

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
=4707.368 / 4405.711
=1.0685

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))
=(232.996 / (232.996 + 996.246)) / (259.65 / (259.65 + 1222.569))
=0.18954445 / 0.17517654
=1.082

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)
=(879.393 / 4707.368) / (854.858 / 4405.711)
=0.18681204 / 0.19403406
=0.9628

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)
=((251.077 + 805.438) / 4775.865) / ((243.469 + 545.542) / 3680.108)
=0.22121961 / 0.21439887
=1.0318

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
=(592.87 - -11.162 - 589.165) / 4775.865
=0.0031

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 -2.34 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.02211.30280.86350.95021.06361.08970.92230.80521.13921.2293
GMI 1.11570.96880.94861.08531.13280.99470.91961.03750.88520.9633
AQI 0.83083.82130.83770.71880.57082.61191.03410.8020.89420.7378
SGI 1.17531.39491.51631.46431.57141.72591.95381.45581.12931.0802
DEPI 0.8550.8290.85511.18631.07910.99840.89351.01660.85511.0465
SGAI 0.89081.11571.06710.88810.71921.09390.95540.89821.07980.9414
LVGI 0.74991.98970.91840.98770.44641.70660.78260.87970.76891.0351
TATA -0.059-0.0155-0.06440.05760.02040.05990.0648-0.0402-0.0921-0.0233
M-score -2.50-1.16-2.54-1.87-1.68-1.07-1.36-2.44-2.73-2.43

Keurig Green Mountain Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.80520.840.86851.06811.13921.11291.27091.07041.22931.146
GMI 1.03751.01390.96210.90990.88520.88590.92260.95710.96330.9792
AQI 0.8020.88990.89820.86670.89420.87670.73580.74580.73780.8399
SGI 1.45581.24891.1981.17471.12931.09051.08271.07081.08021.0685
DEPI 1.01660.96030.85520.82150.85510.90210.93421.03941.04651.082
SGAI 0.89820.98611.01521.04241.07981.05020.99730.95750.94140.9628
LVGI 0.87970.89050.81990.82080.76890.80450.80950.94151.03511.0318
TATA -0.0402-0.0902-0.0868-0.0843-0.0921-0.0672-0.0616-0.0656-0.02330.0031
M-score -2.44-2.83-2.85-2.73-2.73-2.68-2.54-2.75-2.43-2.34
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