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Genuine Parts Co (NYSE:GPC)
Beneish M-Score
-2.73 (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 -2.73 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: -2.73

-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 * 1.0142+0.528 * 1.0038+0.404 * 1.012+0.892 * 0.9877+0.115 * 1.0427
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.994+4.679 * -0.0554-0.327 * 1.0213
=-2.73

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,982 Mil.
Revenue was 3718.267 + 3681.79 + 3921.802 + 3940.401 = $15,262 Mil.
Gross Profit was 1104.471 + 1095.478 + 1169.225 + 1178.33 = $4,548 Mil.
Total Current Assets was $5,770 Mil.
Total Assets was $8,451 Mil.
Property, Plant and Equipment(Net PPE) was $648 Mil.
Depreciation, Depletion and Amortization(DDA) was $140 Mil.
Selling, General & Admin. Expense(SGA) was $3,275 Mil.
Total Current Liabilities was $4,212 Mil.
Long-Term Debt was $250 Mil.
Net Income was 158.025 + 161.273 + 188.016 + 195.373 = $703 Mil.
Non Operating Income was 0 + -0.733 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 135.045 + 263.386 + 441.879 + 331.596 = $1,172 Mil.
Accounts Receivable was $1,978 Mil.
Revenue was 3736.051 + 3822.454 + 3985.909 + 3908.387 = $15,453 Mil.
Gross Profit was 1112.819 + 1146.541 + 1183.422 + 1179.168 = $4,622 Mil.
Total Current Assets was $5,635 Mil.
Total Assets was $8,238 Mil.
Property, Plant and Equipment(Net PPE) was $646 Mil.
Depreciation, Depletion and Amortization(DDA) was $147 Mil.
Selling, General & Admin. Expense(SGA) was $3,336 Mil.
Total Current Liabilities was $3,759 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)
=(1981.651 / 15262.26) / (1978.233 / 15452.801)
=0.12983995 / 0.12801776
=1.0142

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)
=(4621.95 / 15452.801) / (4547.504 / 15262.26)
=0.29910111 / 0.29795745
=1.0038

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 - (5770.268 + 648.204) / 8450.527) / (1 - (5634.699 + 646.116) / 8238.355)
=0.24046488 / 0.23761297
=1.012

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
=15262.26 / 15452.801
=0.9877

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))
=(147.341 / (147.341 + 646.116)) / (140.445 / (140.445 + 648.204))
=0.185695 / 0.17808303
=1.0427

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)
=(3275.007 / 15262.26) / (3335.783 / 15452.801)
=0.21458205 / 0.21586915
=0.994

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 + 4211.926) / 8450.527) / ((500 + 3759.361) / 8238.355)
=0.52800565 / 0.51701596
=1.0213

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
=(702.687 - -0.733 - 1171.906) / 8450.527
=-0.0554

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 -2.73 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

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 0.95550.91891.02391.020.95670.98610.97731.05381.00730.9929
LVGI 1.03790.99740.98391.02121.06620.99640.99291.19241.03281.0389
TATA 0.008-0.0304-0.0115-0.0891-0.0378-0.011-0.0403-0.0501-0.0118-0.0583
M-score -2.65-2.52-2.26-2.94-2.50-2.26-2.50-2.67-2.43-2.79

Genuine Parts Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.01090.98471.02161.0321.01561.00110.96880.97721.01421.0288
GMI 0.96010.96790.9781.00111.01031.01341.01051.00431.00381.0017
AQI 1.28931.01020.99711.03280.96220.94850.94760.99081.0121.0099
SGI 1.1131.10221.09931.08981.06541.05081.02550.9960.98770.983
DEPI 0.83030.83560.89080.91940.96340.96650.9531.01041.04271.0905
SGAI 1.06591.07361.05091.00430.99140.98090.98320.99290.9940.9977
LVGI 1.10171.04111.06331.03281.05211.0691.04841.03891.02131.0388
TATA -0.0372-0.033-0.0129-0.0088-0.016-0.0188-0.0464-0.0556-0.0554-0.0625
M-score -2.51-2.62-2.49-2.42-2.51-2.56-2.74-2.78-2.73-2.76
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