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Keurig Green Mountain Inc (NAS:GMCR)
Beneish M-Score
-2.43 (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 -2.43 suggests that the company is not a manipulator.

GMCR' s 10-Year Beneish M-Score Range
Min: -3.21   Max: -1.06
Current: -2.43

-3.21
-1.06

During the past 13 years, the highest Beneish M-Score of Keurig Green Mountain Inc was -1.06. The lowest was -3.21. And the median was -2.42.


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 * 1.2293+0.528 * 0.9633+0.404 * 0.7378+0.892 * 1.0802+0.115 * 1.0465
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9414+4.679 * -0.0233-0.327 * 1.0351
=-2.43

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $621 Mil.
Revenue was 1195.567 + 1022.371 + 1103.072 + 1386.67 = $4,708 Mil.
Gross Profit was 449.789 + 444.592 + 457.432 + 464.047 = $1,816 Mil.
Total Current Assets was $2,446 Mil.
Total Assets was $4,797 Mil.
Property, Plant and Equipment(Net PPE) was $1,171 Mil.
Depreciation, Depletion and Amortization(DDA) was $258 Mil.
Selling, General & Admin. Expense(SGA) was $869 Mil.
Total Current Liabilities was $843 Mil.
Long-Term Debt was $257 Mil.
Net Income was 141.056 + 155.151 + 162.084 + 138.227 = $597 Mil.
Non Operating Income was -7.307 + 6.259 + -4.569 + -5.56 = $-11 Mil.
Cash Flow from Operations was -104.335 + 230.148 + 320.944 + 272.676 = $719 Mil.
Accounts Receivable was $468 Mil.
Revenue was 1047.177 + 967.072 + 1004.792 + 1339.059 = $4,358 Mil.
Gross Profit was 377.459 + 407.618 + 415.146 + 419.163 = $1,619 Mil.
Total Current Assets was $1,521 Mil.
Total Assets was $3,762 Mil.
Property, Plant and Equipment(Net PPE) was $986 Mil.
Depreciation, Depletion and Amortization(DDA) was $229 Mil.
Selling, General & Admin. Expense(SGA) was $854 Mil.
Total Current Liabilities was $597 Mil.
Long-Term Debt was $236 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)
=(621.451 / 4707.68) / (467.976 / 4358.1)
=0.13200791 / 0.10738074
=1.2293

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)
=(444.592 / 4358.1) / (449.789 / 4707.68)
=0.37158073 / 0.3857229
=0.9633

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 - (2445.52 + 1171.425) / 4797.307) / (1 - (1521.492 + 985.563) / 3761.548)
=0.24604679 / 0.33350445
=0.7378

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
=4707.68 / 4358.1
=1.0802

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))
=(229.193 / (229.193 + 985.563)) / (257.639 / (257.639 + 1171.425))
=0.1886741 / 0.18028514
=1.0465

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)
=(868.619 / 4707.68) / (854.159 / 4358.1)
=0.18451105 / 0.19599344
=0.9414

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)
=((257.177 + 842.988) / 4797.307) / ((236.282 + 597.063) / 3761.548)
=0.22932971 / 0.2215431
=1.0351

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
=(596.518 - -11.177 - 719.433) / 4797.307
=-0.0233

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 -2.43 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 1.02211.30280.86350.95021.04121.11320.92230.80521.13921.2293
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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.73890.80550.840.86851.06811.13921.11291.27091.07041.2293
GMI 0.98351.03811.01390.96210.90990.88520.88590.92260.95710.9633
AQI 0.74950.8020.88990.89820.86670.89420.87670.73580.74580.7378
SGI 1.56841.45531.24891.1981.17471.12931.09051.08271.07081.0802
DEPI 1.01281.01660.95910.85520.82150.85510.90210.93421.03941.0465
SGAI 0.93870.89680.98611.01521.04241.07981.05020.99730.95750.9414
LVGI 0.92430.87970.89050.81990.82080.76890.80450.80950.94151.0351
TATA 0.0016-0.0402-0.0894-0.0868-0.0843-0.0921-0.0672-0.0616-0.0656-0.0233
M-score -2.28-2.44-2.83-2.85-2.73-2.73-2.68-2.54-2.75-2.43
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