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Genuine Parts Co (NYSE:GPC)
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.

Genuine Parts Co has a M-score of -2.43 suggests that the company is not a manipulator.

GPC' s 10-Year Beneish M-Score Range
Min: -2.99   Max: -2.15
Current: -2.43

-2.99
-2.15

During the past 13 years, the highest Beneish M-Score of Genuine Parts Co 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 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 * 1.032+0.528 * 1.0011+0.404 * 1.0328+0.892 * 1.0898+0.115 * 0.9194
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0043+4.679 * -0.0118-0.327 * 1.0328
=-2.43

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,872 Mil.
Revenue was 3822.454 + 3985.909 + 3908.387 + 3624.897 = $15,342 Mil.
Gross Profit was 1146.541 + 1183.422 + 1179.168 + 1084.63 = $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.
Net Income was 165.559 + 190.516 + 197.727 + 157.484 = $711 Mil.
Non Operating Income was 18.601 + 0 + 0 + 0 = $19 Mil.
Cash Flow from Operations was 200.822 + 222.221 + 307.323 + 59.779 = $790 Mil.
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 $3,028 Mil.
Total Current Liabilities was $3,183 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)
=(1872.365 / 15341.647) / (1664.819 / 14077.843)
=0.12204459 / 0.1182581
=1.032

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)
=(1183.422 / 14077.843) / (1146.541 / 15341.647)
=0.29975615 / 0.29943076
=1.0011

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 - (5592.525 + 670.102) / 8246.238) / (1 - (5221.491 + 670.061) / 7680.297)
=0.24054739 / 0.2329005
=1.0328

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
=15341.647 / 14077.843
=1.0898

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))
=(133.957 / (133.957 + 670.061)) / (148.313 / (148.313 + 670.102))
=0.16660945 / 0.1812198
=0.9194

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)
=(3314.031 / 15341.647) / (3028.028 / 14077.843)
=0.21601533 / 0.21509176
=1.0043

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 + 3584.115) / 8246.238) / ((500 + 3183.044) / 7680.297)
=0.49527009 / 0.47954448
=1.0328

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
=(711.286 - 18.601 - 790.145) / 8246.238
=-0.0118

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 -2.43 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.

Genuine Parts Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.9820.96770.95540.99111.06171.03140.96330.97641.03291.032
GMI 0.993111.05560.99870.99281.0311.00280.9970.96851.0011
AQI 1.20810.43121.1951.6620.9471.06471.47541.36571.1161.0328
SGI 1.07541.0691.03681.01590.91311.11441.11161.04451.08181.0898
DEPI 0.98420.97990.85550.98541.10271.00861.03191.020.88830.9194
SGAI 0.99820.95550.91891.01371.03030.95670.98610.97731.05691.0043
LVGI 1.00031.03790.99740.98391.02121.06620.99640.99291.19241.0328
TATA -0.00060.008-0.0304-0.0115-0.0893-0.0378-0.011-0.0403-0.0513-0.0118
M-score -2.35-2.65-2.52-2.26-2.94-2.50-2.26-2.50-2.67-2.43

Genuine Parts Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.99580.97640.98381.05051.03371.03291.01090.98471.02161.032
GMI 0.98930.9971.00040.99470.98660.96850.96010.96790.9781.0011
AQI 1.66231.36571.17531.29071.32971.1161.28931.01020.99711.0328
SGI 1.05361.04451.02891.0431.05961.08181.1131.10221.09931.0898
DEPI 1.07611.021.01950.92320.91040.88830.83030.83560.89080.9194
SGAI 0.99250.97730.98160.98431.01011.05691.06911.07671.05391.0043
LVGI 0.93740.99291.11831.1641.15531.19241.10171.04111.06331.0328
TATA -0.0418-0.0403-0.0301-0.0358-0.0378-0.0513-0.0406-0.0363-0.0161-0.0118
M-score -2.34-2.50-2.57-2.51-2.51-2.67-2.53-2.63-2.50-2.43
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