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Genuine Parts Company (NYSE:GPC)
Beneish M-Score
-2.67 (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 Company has a M-score of -2.67 suggests that the company is not a manipulator.

GPC' s 10-Year Beneish M-Score Range
Min: -2.99   Max: -2.15
Current: -2.67

-2.99
-2.15

During the past 13 years, the highest Beneish M-Score of Genuine Parts Company was -2.15. The lowest was -2.99. And the median was -2.46.


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 Company 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 * 1.0329+0.528 * 0.9685+0.404 * 1.116+0.892 * 1.0818+0.115 * 0.8883
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0538+4.679 * -0.0501-0.327 * 1.1924
=-2.67

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,665 Mil.
Revenue was 3517.801 + 3685.243 + 3675.997 + 3198.802 = $14,078 Mil.
Gross Profit was 1092.141 + 1100.923 + 1105.108 + 921.748 = $4,220 Mil.
Total Current Assets was $5,221 Mil.
Total Assets was $7,680 Mil.
Property, Plant and Equipment(Net PPE) was $670 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $3,019 Mil.
Total Current Liabilities was $3,183 Mil.
Long-Term Debt was $500 Mil.
Net Income was 150.467 + 173.746 + 216.357 + 144.389 = $685 Mil.
Non Operating Income was 13.039 + 0 + 0 + 0 = $13 Mil.
Cash Flow from Operations was 219.246 + 370.407 + 350.7 + 116.378 = $1,057 Mil.
Accounts Receivable was $1,490 Mil.
Revenue was 3118.966 + 3375.778 + 3337.836 + 3181.288 = $13,014 Mil.
Gross Profit was 910.658 + 976.036 + 972.286 + 919.111 = $3,778 Mil.
Total Current Assets was $4,820 Mil.
Total Assets was $6,807 Mil.
Property, Plant and Equipment(Net PPE) was $566 Mil.
Depreciation, Depletion and Amortization(DDA) was $98 Mil.
Selling, General & Admin. Expense(SGA) was $2,648 Mil.
Total Current Liabilities was $2,488 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)
=(1664.819 / 14077.843) / (1490.028 / 13013.868)
=0.1182581 / 0.1144954
=1.0329

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)
=(1100.923 / 13013.868) / (1092.141 / 14077.843)
=0.29031269 / 0.29975615
=0.9685

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 - (5221.491 + 670.061) / 7680.297) / (1 - (4820.131 + 566.365) / 6807.061)
=0.2329005 / 0.20868992
=1.116

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
=14077.843 / 13013.868
=1.0818

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))
=(98.383 / (98.383 + 566.365)) / (133.957 / (133.957 + 670.061))
=0.14800045 / 0.16660945
=0.8883

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)
=(3019.036 / 14077.843) / (2648.43 / 13013.868)
=0.21445302 / 0.20350829
=1.0538

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 + 3183.044) / 7680.297) / ((250 + 2487.638) / 6807.061)
=0.47954448 / 0.40217621
=1.1924

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
=(684.959 - 13.039 - 1056.731) / 7680.297
=-0.0501

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 Company has a M-score of -2.67 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 Company 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 1.14851.20810.43121.1951.6620.9471.06471.47541.36571.116
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 0.91871.00031.03790.99740.98391.02121.06620.99640.99291.1924
TATA -0.0358-0.00060.008-0.0304-0.0115-0.0893-0.0378-0.011-0.0403-0.0501
M-score -2.51-2.35-2.65-2.52-2.26-2.94-2.50-2.26-2.50-2.67

Genuine Parts Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.97390.96330.98460.95330.99580.97640.98381.05051.03371.0329
GMI 1.02261.00280.99410.98990.98930.9971.00040.99470.98660.9685
AQI 1.13341.47541.52681.84821.66231.36571.17531.29071.32971.116
SGI 1.12711.11161.09381.07561.05361.04451.02891.0431.05961.0818
DEPI 1.01611.03191.04041.12181.07611.021.01950.92320.91040.8883
SGAI 0.97140.98610.99090.99670.99250.97730.98160.98431.01011.0538
LVGI 1.04960.99640.98570.97170.93740.99291.11831.1641.15531.1924
TATA -0.0102-0.0096-0.0261-0.0315-0.0418-0.0403-0.0301-0.0358-0.0378-0.0501
M-score -2.38-2.26-2.31-2.24-2.34-2.50-2.57-2.51-2.51-2.67
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