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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

GMCR' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -0.72
Current: -2.2

-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 -2.34.


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 * 1.1246+0.528 * 1.039+0.404 * 1.2346+0.892 * 1.0262+0.115 * 1.1352
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0023+4.679 * 0.0138-0.327 * 1.1592
=-2.20

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $441 Mil.
Revenue was 969.525 + 1127.184 + 1386.358 + 1195.567 = $4,679 Mil.
Gross Profit was 349.26 + 458.808 + 464.122 + 449.789 = $1,722 Mil.
Total Current Assets was $1,398 Mil.
Total Assets was $3,994 Mil.
Property, Plant and Equipment(Net PPE) was $1,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $256 Mil.
Selling, General & Admin. Expense(SGA) was $872 Mil.
Total Current Liabilities was $525 Mil.
Long-Term Debt was $410 Mil.
Net Income was 113.621 + 155.479 + 134.579 + 141.056 = $545 Mil.
Non Operating Income was 1.889 + -5.065 + -5.545 + -7.307 = $-16 Mil.
Cash Flow from Operations was 242.137 + 225.557 + 142.408 + -104.335 = $506 Mil.
Accounts Receivable was $382 Mil.
Revenue was 1022.371 + 1103.072 + 1386.67 + 1047.177 = $4,559 Mil.
Gross Profit was 444.592 + 457.432 + 464.047 + 377.459 = $1,744 Mil.
Total Current Assets was $2,340 Mil.
Total Assets was $4,644 Mil.
Property, Plant and Equipment(Net PPE) was $1,106 Mil.
Depreciation, Depletion and Amortization(DDA) was $249 Mil.
Selling, General & Admin. Expense(SGA) was $848 Mil.
Total Current Liabilities was $683 Mil.
Long-Term Debt was $254 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)
=(441.273 / 4678.634) / (382.382 / 4559.29)
=0.09431663 / 0.08386876
=1.1246

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)
=(458.808 / 4559.29) / (349.26 / 4678.634)
=0.38241261 / 0.36805166
=1.039

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 - (1398.026 + 1324.408) / 3994.487) / (1 - (2340.25 + 1105.648) / 4643.664)
=0.31845216 / 0.25793554
=1.2346

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
=4678.634 / 4559.29
=1.0262

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))
=(249.042 / (249.042 + 1105.648)) / (255.928 / (255.928 + 1324.408))
=0.18383689 / 0.16194531
=1.1352

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)
=(871.934 / 4678.634) / (847.733 / 4559.29)
=0.18636508 / 0.18593531
=1.0023

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)
=((410.024 + 524.723) / 3994.487) / ((254.163 + 683.276) / 4643.664)
=0.23400927 / 0.20187486
=1.1592

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
=(544.735 - -16.028 - 505.767) / 3994.487
=0.0138

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 -2.20 signals that the company is likely to 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 1.02211.30280.86350.95021.04121.11320.92230.80521.13921.2293
GMI 1.11570.96880.94861.08531.13690.99110.91961.03750.88520.9633
AQI 0.83083.82130.83770.71880.57052.61331.03410.8020.89420.7378
SGI 1.17531.39491.51631.46431.60521.68951.95381.45581.12931.0802
DEPI 0.8550.8290.85511.18631.07910.99840.89351.01660.85511.0465
SGAI 0.89081.11571.06710.88810.71361.10260.95540.89821.07980.9414
LVGI 0.74991.98970.91840.98770.44091.72820.78260.87970.76891.0351
TATA -0.059-0.0155-0.06440.05760.02220.06590.0648-0.0402-0.0921-0.0233
M-score -2.50-1.16-2.54-1.87-1.66-1.06-1.36-2.44-2.73-2.43

Keurig Green Mountain Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.86851.06811.13921.11291.27091.07041.22931.1461.15931.1246
GMI 0.96210.90990.88520.88590.92260.95710.96330.97920.98651.039
AQI 0.89820.86670.89420.87670.73580.74580.73780.83991.12421.2346
SGI 1.1981.17471.12931.09051.08271.07081.08021.06851.05051.0262
DEPI 0.85520.82150.85510.90210.93421.03941.04651.0821.15621.1352
SGAI 1.01521.04241.07981.05020.99730.95750.94140.96281.00631.0023
LVGI 0.81990.82080.76890.80450.80950.94151.03511.03181.4761.1592
TATA -0.0868-0.0843-0.0921-0.0672-0.0616-0.0656-0.02330.00310.02570.0138
M-score -2.85-2.73-2.73-2.68-2.54-2.75-2.43-2.34-2.26-2.20
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