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Genuine Parts Co (NYSE:GPC)
Beneish M-Score
-2.50 (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.

Genuine Parts Co has a M-score of -2.50 suggests that the company is not a manipulator.

GPC' s 10-Year Beneish M-Score Range
Min: -3.21   Max: -2.07
Current: -2.5

-3.21
-2.07

During the past 13 years, the highest Beneish M-Score of Genuine Parts Co was -2.07. The lowest was -3.21. And the median was -2.43.


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 Genuine Parts Co 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 * 1.0216+0.528 * 0.978+0.404 * 0.9971+0.892 * 1.0993+0.115 * 0.8908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.051+4.679 * -0.015-0.327 * 1.0633
=-2.50

* 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 $1,976 Mil.
Revenue was 3985.909 + 3908.387 + 3624.897 + 3517.801 = $15,037 Mil.
Gross Profit was 1183.422 + 1179.168 + 1084.63 + 1092.141 = $4,539 Mil.
Total Current Assets was $5,585 Mil.
Total Assets was $8,341 Mil.
Property, Plant and Equipment(Net PPE) was $662 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General & Admin. Expense(SGA) was $3,284 Mil.
Total Current Liabilities was $3,636 Mil.
Long-Term Debt was $500 Mil.
Net Income was 190.516 + 197.727 + 157.484 + 150.467 = $696 Mil.
Non Operating Income was 0 + 0 + 0 + 13.039 = $13 Mil.
Cash Flow from Operations was 222.221 + 307.323 + 59.779 + 219.246 = $809 Mil.
Accounts Receivable was $1,760 Mil.
Revenue was 3685.243 + 3675.997 + 3198.802 + 3118.966 = $13,679 Mil.
Gross Profit was 1100.923 + 1105.108 + 921.748 + 910.658 = $4,038 Mil.
Total Current Assets was $5,295 Mil.
Total Assets was $7,944 Mil.
Property, Plant and Equipment(Net PPE) was $649 Mil.
Depreciation, Depletion and Amortization(DDA) was $123 Mil.
Selling, General & Admin. Expense(SGA) was $2,842 Mil.
Total Current Liabilities was $3,454 Mil.
Long-Term Debt was $250 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)
=(1976.056 / 15036.994) / (1759.517 / 13679.008)
=0.13141297 / 0.12862899
=1.0216

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)
=(1179.168 / 13679.008) / (1183.422 / 15036.994)
=0.29522879 / 0.30187955
=0.978

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 - (5585.377 + 662.253) / 8341.457) / (1 - (5295.475 + 648.503) / 7943.903)
=0.25101454 / 0.25175597
=0.9971

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
=15036.994 / 13679.008
=1.0993

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))
=(123.126 / (123.126 + 648.503)) / (144.508 / (144.508 + 662.253))
=0.15956632 / 0.1791212
=0.8908

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)
=(3284.103 / 15036.994) / (2842.428 / 13679.008)
=0.21840156 / 0.20779489
=1.051

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)
=((500 + 3635.782) / 8341.457) / ((250 + 3454.094) / 7943.903)
=0.4958105 / 0.46628137
=1.0633

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
=(696.194 - 13.039 - 808.569) / 8341.457
=-0.015

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.

Genuine Parts Co has a M-score of -2.50 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.

Genuine Parts Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96220.9820.96770.95540.99111.06171.03140.96330.97641.0329
GMI 0.99790.993111.05560.99870.99281.0311.00280.9970.9685
AQI 1.14851.20810.43121.1951.6620.9471.06471.31831.52841.116
SGI 1.07671.07541.0691.03681.01590.91311.11441.11161.04451.0818
DEPI 1.18910.98420.97990.85550.98541.10271.00861.03191.020.8883
SGAI 0.99350.99820.95550.91891.01371.03030.95670.98610.97731.0538
LVGI 0.91871.00031.03790.99740.98391.02121.06620.96731.02271.1924
TATA -0.0358-0.00060.008-0.0304-0.0115-0.0893-0.0378-0.0116-0.0403-0.0501
M-score -2.51-2.35-2.65-2.52-2.26-2.94-2.50-2.32-2.44-2.67

Genuine Parts Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.95330.99580.97640.98381.05051.03371.03291.01090.98471.0216
GMI 0.98990.98930.9971.00040.99470.98660.96850.96010.96790.978
AQI 1.84821.66231.52841.17531.29071.32971.1161.28931.01020.9971
SGI 1.07561.05361.04451.02891.0431.05961.08181.1131.10221.0993
DEPI 1.12181.07611.021.01950.92320.91040.88830.83030.83560.8908
SGAI 0.99670.99250.97730.98160.98431.01011.05381.06611.07381.051
LVGI 0.97170.93741.02271.11831.1641.15531.19241.10171.04111.0633
TATA -0.0315-0.0418-0.0403-0.0301-0.0358-0.0378-0.0501-0.0395-0.0352-0.015
M-score -2.24-2.34-2.44-2.57-2.51-2.51-2.67-2.52-2.63-2.50
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