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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 -2.63 suggests that the company is not a manipulator.
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 -2.42.
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 * 0.9847||+||0.528 * 0.9679||+||0.404 * 1.0102||+||0.892 * 1.1022||+||0.115 * 0.8356|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0738||+||4.679 * -0.0352||-||0.327 * 1.0411|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,909 Mil.|
Revenue was 3908.387 + 3624.897 + 3517.801 + 3685.243 = $14,736 Mil.
Gross Profit was 1179.168 + 1084.63 + 1092.141 + 1100.923 = $4,457 Mil.
Total Current Assets was $5,512 Mil.
Total Assets was $8,252 Mil.
Property, Plant and Equipment(Net PPE) was $661 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General & Admin. Expense(SGA) was $3,228 Mil.
Total Current Liabilities was $3,507 Mil.
Long-Term Debt was $500 Mil.
Net Income was 197.727 + 157.484 + 150.467 + 173.746 = $679 Mil.
Non Operating Income was 0 + 0 + 13.039 + 0 = $13 Mil.
Cash Flow from Operations was 307.323 + 59.779 + 219.246 + 370.407 = $957 Mil.
|Accounts Receivable was $1,759 Mil.
Revenue was 3675.997 + 3198.802 + 3118.966 + 3375.778 = $13,370 Mil.
Gross Profit was 1105.108 + 921.748 + 910.658 + 976.036 = $3,914 Mil.
Total Current Assets was $5,108 Mil.
Total Assets was $7,660 Mil.
Property, Plant and Equipment(Net PPE) was $643 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $2,727 Mil.
Total Current Liabilities was $3,323 Mil.
Long-Term Debt was $250 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1909.268 / 14736.328)||/||(1759.176 / 13369.543)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1084.63 / 13369.543)||/||(1179.168 / 14736.328)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (5512.361 + 661.304) / 8251.548)||/||(1 - (5107.741 + 642.955) / 7660.313)|
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.
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))|
|=||(113.515 / (113.515 + 642.955))||/||(144.745 / (144.745 + 661.304))|
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)|
|=||(3227.904 / 14736.328)||/||(2727.365 / 13369.543)|
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 + 3506.854) / 8251.548)||/||((250 + 3322.947) / 7660.313)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(679.424 - 13.039||-||956.755)||/||8251.548|
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 -2.63 suggests that the company will not be a manipulator.
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
Genuine Parts Co Annual Data
Genuine Parts Co Quarterly Data