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Garmin Ltd (NAS:GRMN)
Beneish M-Score
-2.36 (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.

Garmin Ltd has a M-score of -2.36 suggests that the company is not a manipulator.

GRMN' s 10-Year Beneish M-Score Range
Min: -2.91   Max: -1.19
Current: -2.36

-2.91
-1.19

During the past 13 years, the highest Beneish M-Score of Garmin Ltd was -1.19. The lowest was -2.91. And the median was -2.48.


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 Garmin Ltd 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 * 1.1999+0.528 * 0.9906+0.404 * 0.9854+0.892 * 0.9691+0.115 * 1.1329
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9503+4.679 * -0.0127-0.327 * 0.9836
=-2.36

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $702 Mil.
Revenue was 759.695 + 643.637 + 696.563 + 531.957 = $2,632 Mil.
Gross Profit was 394.638 + 352.889 + 383.64 + 276.133 = $1,407 Mil.
Total Current Assets was $2,596 Mil.
Total Assets was $4,880 Mil.
Property, Plant and Equipment(Net PPE) was $415 Mil.
Depreciation, Depletion and Amortization(DDA) was $79 Mil.
Selling, General & Admin. Expense(SGA) was $468 Mil.
Total Current Liabilities was $905 Mil.
Long-Term Debt was $0 Mil.
Net Income was 163.585 + 187.669 + 172.491 + 88.666 = $612 Mil.
Non Operating Income was 22.309 + 0.616 + 28.52 + -7.19 = $44 Mil.
Cash Flow from Operations was 149.813 + 216.61 + 204.298 + 59.363 = $630 Mil.
Accounts Receivable was $604 Mil.
Revenue was 768.548 + 672.376 + 718.154 + 556.597 = $2,716 Mil.
Gross Profit was 373.854 + 359.055 + 421.813 + 283.759 = $1,438 Mil.
Total Current Assets was $2,536 Mil.
Total Assets was $4,819 Mil.
Property, Plant and Equipment(Net PPE) was $410 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $509 Mil.
Total Current Liabilities was $909 Mil.
Long-Term Debt was $0 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)
=(701.965 / 2631.852) / (603.673 / 2715.675)
=0.26671903 / 0.22229206
=1.1999

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)
=(352.889 / 2715.675) / (394.638 / 2631.852)
=0.52969556 / 0.53471852
=0.9906

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 - (2595.636 + 414.848) / 4879.603) / (1 - (2536.12 + 409.751) / 4819.124)
=0.38304735 / 0.38871235
=0.9854

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
=2631.852 / 2715.675
=0.9691

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))
=(90.467 / (90.467 + 409.751)) / (78.804 / (78.804 + 414.848))
=0.18085515 / 0.15963472
=1.1329

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)
=(468.346 / 2631.852) / (508.547 / 2715.675)
=0.17795302 / 0.18726357
=0.9503

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)
=((0 + 905.304) / 4879.603) / ((0 + 909.026) / 4819.124)
=0.18552821 / 0.18862889
=0.9836

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
=(612.411 - 44.255 - 630.084) / 4879.603
=-0.0127

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.

Garmin Ltd has a M-score of -2.36 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.

Garmin Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.00031.15211.36721.31670.70841.39830.93640.79271.00951.1999
GMI 1.06971.03591.04671.08111.03480.90720.97921.03150.91610.9906
AQI 1.11581.01450.89680.70640.96861.50451.0291.24251.17480.9854
SGI 1.33081.34781.72611.79271.09870.84330.91291.02550.98450.9691
DEPI 0.95950.85731.30011.030.97590.83470.99030.98051.02161.1329
SGAI 0.77331.47021.01851.0311.11431.02541.12851.09641.06240.9503
LVGI 1.29440.90971.24131.36760.67031.09720.93621.14440.98270.9836
TATA 0.01930.03620.07810.0437-0.05-0.1018-0.0258-0.0669-0.0265-0.0127
M-score -2.07-1.90-1.19-1.47-2.80-2.63-2.74-2.91-2.59-2.36

Garmin Ltd Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.0720.79270.97470.93830.92141.00951.09281.06341.01161.1999
GMI 1.0441.03150.99260.91010.91160.91610.92720.99740.9990.9906
AQI 1.33441.24251.081.19991.20631.17481.11941.06811.07810.9854
SGI 0.92271.02551.01471.05141.06330.98450.95860.93620.92440.9691
DEPI 1.18420.98050.95340.77310.86291.02161.08721.26011.06381.1329
SGAI 1.1541.09641.13391.12261.05551.06241.03610.98481.0040.9503
LVGI 1.35441.14441.15190.92630.90490.98270.96310.95721.05840.9836
TATA -0.0651-0.0669-0.0478-0.0352-0.0261-0.0265-0.0123-0.0184-0.0197-0.0127
M-score -2.75-2.91-2.76-2.65-2.58-2.59-2.46-2.49-2.61-2.36
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