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Genuine Parts Co (NYSE:GPC)
Beneish M-Score
-2.75 (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 -2.75 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: -2.75

-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 -2.44.


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 * 0.9688+0.528 * 1.0105+0.404 * 0.9476+0.892 * 1.0255+0.115 * 0.953
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9832+4.679 * -0.0494-0.327 * 1.0484
=-2.75

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,963 Mil.
Revenue was 3921.802 + 3940.401 + 3736.051 + 3822.454 = $15,421 Mil.
Gross Profit was 1169.225 + 1178.33 + 1112.819 + 1146.541 = $4,607 Mil.
Total Current Assets was $5,623 Mil.
Total Assets was $8,203 Mil.
Property, Plant and Equipment(Net PPE) was $628 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General & Admin. Expense(SGA) was $3,320 Mil.
Total Current Liabilities was $3,764 Mil.
Long-Term Debt was $500 Mil.
Net Income was 188.016 + 195.373 + 161.01 + 165.559 = $710 Mil.
Non Operating Income was 0 + 0 + 0 + 18.601 = $19 Mil.
Cash Flow from Operations was 441.879 + 331.596 + 122.512 + 200.822 = $1,097 Mil.
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 $3,293 Mil.
Total Current Liabilities was $3,636 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)
=(1963.158 / 15420.708) / (1976.056 / 15036.994)
=0.12730661 / 0.13141297
=0.9688

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)
=(1178.33 / 15036.994) / (1169.225 / 15420.708)
=0.30187955 / 0.2987486
=1.0105

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 - (5623.482 + 628.461) / 8203.128) / (1 - (5585.377 + 662.253) / 8341.457)
=0.23785866 / 0.25101454
=0.9476

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
=15420.708 / 15036.994
=1.0255

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))
=(144.508 / (144.508 + 662.253)) / (145.454 / (145.454 + 628.461))
=0.1791212 / 0.1879457
=0.953

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)
=(3320.404 / 15420.708) / (3293.095 / 15036.994)
=0.21532111 / 0.21899956
=0.9832

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 + 3764.068) / 8203.128) / ((500 + 3635.782) / 8341.457)
=0.51981 / 0.4958105
=1.0484

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
=(709.958 - 18.601 - 1096.809) / 8203.128
=-0.0494

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 -2.75 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.05051.03371.03291.01090.98471.02161.0321.01561.00110.9688
GMI 0.99470.98660.96850.96010.96790.9781.00111.01031.01341.0105
AQI 1.29071.32971.1161.28931.01020.99711.03280.96220.94850.9476
SGI 1.0431.05961.08181.1131.10221.09931.08981.06541.05081.0255
DEPI 0.92320.91040.88830.83030.83560.89080.91940.96340.96650.953
SGAI 0.98431.01011.05691.06911.07671.05391.00430.99140.98090.9832
LVGI 1.1641.15531.19241.10171.04111.06331.03281.05211.0691.0484
TATA -0.0358-0.0378-0.0513-0.0406-0.0363-0.0161-0.0118-0.019-0.0218-0.0494
M-score -2.51-2.51-2.67-2.53-2.63-2.50-2.43-2.53-2.57-2.75
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