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Garmin Ltd (NAS:GRMN)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

GRMN' s 10-Year Beneish M-Score Range
Min: -3.31   Max: -1.19
Current: -2.77

-3.31
-1.19

During the past 13 years, the highest Beneish M-Score of Garmin Ltd was -1.19. The lowest was -3.31. And the median was -2.41.


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 * 0.94+0.528 * 0.9465+0.404 * 0.9547+0.892 * 1.0706+0.115 * 1.2003
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.964+4.679 * -0.0456-0.327 * 1.1914
=-2.77

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $479 Mil.
Revenue was 706.283 + 777.848 + 583.221 + 759.695 = $2,827 Mil.
Gross Profit was 398.246 + 444.485 + 330.834 + 394.638 = $1,568 Mil.
Total Current Assets was $2,421 Mil.
Total Assets was $4,669 Mil.
Property, Plant and Equipment(Net PPE) was $432 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $495 Mil.
Total Current Liabilities was $1,123 Mil.
Long-Term Debt was $0 Mil.
Net Income was -146.834 + 181.983 + 118.818 + 163.585 = $318 Mil.
Non Operating Income was -12.186 + -19.704 + 12.33 + 22.309 = $3 Mil.
Cash Flow from Operations was 142.342 + 164.179 + 71.173 + 149.813 = $528 Mil.
Accounts Receivable was $476 Mil.
Revenue was 643.637 + 696.563 + 531.957 + 768.548 = $2,641 Mil.
Gross Profit was 352.889 + 383.64 + 276.133 + 373.854 = $1,387 Mil.
Total Current Assets was $2,445 Mil.
Total Assets was $4,823 Mil.
Property, Plant and Equipment(Net PPE) was $414 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $480 Mil.
Total Current Liabilities was $974 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)
=(478.722 / 2827.047) / (475.707 / 2640.705)
=0.16933641 / 0.18014394
=0.94

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)
=(444.485 / 2640.705) / (398.246 / 2827.047)
=0.52505524 / 0.55471416
=0.9465

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 - (2421.485 + 431.753) / 4669.364) / (1 - (2444.638 + 413.675) / 4823.226)
=0.38894505 / 0.40738564
=0.9547

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
=2827.047 / 2640.705
=1.0706

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))
=(88.006 / (88.006 + 413.675)) / (73.9 / (73.9 + 431.753))
=0.17542223 / 0.14614765
=1.2003

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)
=(494.965 / 2827.047) / (479.585 / 2640.705)
=0.17508198 / 0.18161249
=0.964

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 + 1123.483) / 4669.364) / ((0 + 974.033) / 4823.226)
=0.24060729 / 0.20194637
=1.1914

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
=(317.552 - 2.749 - 527.507) / 4669.364
=-0.0456

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 -2.77 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 1.00031.15211.36721.31670.70841.39830.93640.79271.00950.965
GMI 1.06971.03591.04671.08111.03480.90720.97921.03150.91610.9906
AQI 1.11581.01450.89680.70640.95291.53021.02841.25811.16030.9854
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 1.29440.90971.24131.36760.67251.09060.93871.14440.98270.9836
TATA 0.01930.03620.07810.0437-0.0502-0.1018-0.0258-0.0669-0.0265-0.0127
M-score -2.07-1.90-1.19-1.47-2.81-2.62-2.74-2.91-2.59-2.58

Garmin Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93830.92141.00951.09281.06341.01160.9650.95150.9910.94
GMI 0.91010.91160.91610.92720.99740.9990.99060.97580.94710.9465
AQI 1.19991.20631.16031.11941.06811.07810.98541.0090.95640.9547
SGI 1.05141.06330.98450.95860.93620.92440.96910.99711.03561.0706
DEPI 0.77310.85061.02161.08721.26011.09651.13291.14961.11831.2003
SGAI 1.12261.05551.06241.03610.98481.0040.95030.94470.96680.964
LVGI 0.92630.90490.98270.96310.95721.05840.98361.11111.05661.1914
TATA -0.0352-0.0261-0.0265-0.0123-0.0184-0.0197-0.0127-0.01330.0073-0.0456
M-score -2.65-2.58-2.59-2.46-2.49-2.61-2.58-2.61-2.47-2.77
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