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Genuine Parts Co (NYSE:GPC)
Beneish M-Score
-2.60 (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 -2.79 suggests that the company is not a manipulator.

GPC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.21   Max: -2.07
Current: -2.6

-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 -2.45.


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 * 0.9772+0.528 * 1.0043+0.404 * 0.9908+0.892 * 0.996+0.115 * 1.0104
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9929+4.679 * -0.0583-0.327 * 1.0389
=-2.79

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,822 Mil.
Revenue was $15,280 Mil.
Gross Profit was $4,556 Mil.
Total Current Assets was $5,555 Mil.
Total Assets was $8,145 Mil.
Property, Plant and Equipment(Net PPE) was $648 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General & Admin. Expense(SGA) was $3,277 Mil.
Total Current Liabilities was $3,941 Mil.
Long-Term Debt was $250 Mil.
Net Income was $706 Mil.
Non Operating Income was $21 Mil.
Cash Flow from Operations was $1,159 Mil.
Accounts Receivable was $1,872 Mil.
Revenue was $15,342 Mil.
Gross Profit was $4,594 Mil.
Total Current Assets was $5,593 Mil.
Total Assets was $8,246 Mil.
Property, Plant and Equipment(Net PPE) was $670 Mil.
Depreciation, Depletion and Amortization(DDA) was $148 Mil.
Selling, General & Admin. Expense(SGA) was $3,314 Mil.
Total Current Liabilities was $3,584 Mil.
Long-Term Debt was $500 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)
=(1822.419 / 15280.044) / (1872.365 / 15341.647)
=0.11926792 / 0.12204459
=0.9772

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)
=(4593.761 / 15341.647) / (4555.852 / 15280.044)
=0.29943076 / 0.29815699
=1.0043

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 - (5555.316 + 648.217) / 8144.771) / (1 - (5592.525 + 670.102) / 8246.238)
=0.23834163 / 0.24054739
=0.9908

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
=15280.044 / 15341.647
=0.996

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))
=(148.313 / (148.313 + 670.102)) / (141.675 / (141.675 + 648.217))
=0.1812198 / 0.17935996
=1.0104

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)
=(3277.39 / 15280.044) / (3314.03 / 15341.647)
=0.21448826 / 0.21601527
=0.9929

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)
=((250 + 3940.654) / 8144.771) / ((500 + 3584.115) / 8246.238)
=0.51452079 / 0.49527009
=1.0389

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
=(705.672 - 20.929 - 1159.373) / 8144.771
=-0.0583

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 -2.79 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 local exchange's currency.

Genuine Parts Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.96770.95540.99111.06171.03140.96330.97641.03291.0320.9772
GMI 11.05560.99870.99281.0311.00280.9970.96851.00111.0043
AQI 0.43121.1951.6620.9471.06471.47541.36571.1161.03280.9908
SGI 1.0691.03681.01590.91311.11441.11161.04451.08181.08980.996
DEPI 0.97990.85550.98541.10271.00861.03191.020.88830.91941.0104
SGAI 0.95550.91891.01371.03030.95670.98610.98031.05371.00430.9929
LVGI 1.03790.99740.98391.02121.06620.99640.99291.19241.03281.0389
TATA 0.008-0.0304-0.0115-0.0893-0.0378-0.011-0.0415-0.0513-0.0118-0.0583
M-score -2.65-2.52-2.26-2.94-2.50-2.26-2.50-2.67-2.43-2.79
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