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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-2.26 (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 -2.26 suggests that the company is not a manipulator.

GMCR' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -0.72
Current: -2.26

-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 * 1.1593+0.528 * 0.9865+0.404 * 1.1242+0.892 * 1.0505+0.115 * 1.1562
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0063+4.679 * 0.0257-0.327 * 1.476
=-2.26

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $524 Mil.
Revenue was 1127.184 + 1386.358 + 1195.567 + 1022.371 = $4,731 Mil.
Gross Profit was 458.808 + 464.122 + 449.789 + 444.592 = $1,817 Mil.
Total Current Assets was $1,526 Mil.
Total Assets was $4,055 Mil.
Property, Plant and Equipment(Net PPE) was $1,288 Mil.
Depreciation, Depletion and Amortization(DDA) was $256 Mil.
Selling, General & Admin. Expense(SGA) was $897 Mil.
Total Current Liabilities was $596 Mil.
Long-Term Debt was $509 Mil.
Net Income was 155.479 + 134.579 + 141.056 + 155.151 = $586 Mil.
Non Operating Income was -5.065 + -5.545 + -7.307 + 6.259 = $-12 Mil.
Cash Flow from Operations was 225.557 + 142.408 + -104.335 + 230.148 = $494 Mil.
Accounts Receivable was $431 Mil.
Revenue was 1103.072 + 1386.67 + 1047.177 + 967.072 = $4,504 Mil.
Gross Profit was 457.432 + 464.047 + 377.459 + 407.618 = $1,707 Mil.
Total Current Assets was $2,145 Mil.
Total Assets was $4,363 Mil.
Property, Plant and Equipment(Net PPE) was $1,030 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $849 Mil.
Total Current Liabilities was $554 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)
=(524.327 / 4731.48) / (430.547 / 4503.991)
=0.1108167 / 0.09559233
=1.1593

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)
=(464.122 / 4503.991) / (458.808 / 4731.48)
=0.37889863 / 0.38408933
=0.9865

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 - (1526.05 + 1287.64) / 4054.685) / (1 - (2145.397 + 1029.551) / 4362.729)
=0.30606447 / 0.27225642
=1.1242

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
=4731.48 / 4503.991
=1.0505

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))
=(244.598 / (244.598 + 1029.551)) / (256.364 / (256.364 + 1287.64))
=0.1919697 / 0.16603843
=1.1562

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)
=(897.278 / 4731.48) / (848.762 / 4503.991)
=0.18964003 / 0.18844665
=1.0063

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)
=((509.004 + 595.888) / 4054.685) / ((251.19 + 554.257) / 4362.729)
=0.27249762 / 0.18461999
=1.476

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
=(586.265 - -11.658 - 493.778) / 4054.685
=0.0257

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 -2.26 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.840.86851.06811.13921.11291.27091.07041.22931.1461.1593
GMI 1.01390.96210.90990.88520.88590.92260.95710.96330.97920.9865
AQI 0.88990.89820.86670.89420.87670.73580.74580.73780.83991.1242
SGI 1.24891.1981.17471.12931.09051.08271.07081.08021.06851.0505
DEPI 0.96030.85520.82150.85510.90210.93421.03941.04651.0821.1562
SGAI 0.98611.01521.04241.07981.05020.99730.95750.94140.96281.0063
LVGI 0.89050.81990.82080.76890.80450.80950.94151.03511.03181.476
TATA -0.0902-0.0868-0.0843-0.0921-0.0672-0.0616-0.0656-0.02330.00310.0257
M-score -2.83-2.85-2.73-2.73-2.68-2.54-2.75-2.43-2.34-2.26
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