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Garmin Ltd (NAS:GRMN)
Beneish M-Score
-2.25 (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 -2.25 suggests that the company is not a manipulator.

GRMN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.31   Max: -1.19
Current: -2.25

-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 -2.35.


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 * 0.9639+0.528 * 1.0492+0.404 * 1.1746+0.892 * 0.9952+0.115 * 1.0007
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0668+4.679 * 0.0276-0.327 * 0.8508
=-2.25

* 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 $408 Mil.
Revenue was 624.04 + 781.357 + 679.69 + 773.83 = $2,859 Mil.
Gross Profit was 339.85 + 413.143 + 362.19 + 419.25 = $1,534 Mil.
Total Current Assets was $2,129 Mil.
Total Assets was $4,410 Mil.
Property, Plant and Equipment(Net PPE) was $449 Mil.
Depreciation, Depletion and Amortization(DDA) was $80 Mil.
Selling, General & Admin. Expense(SGA) was $564 Mil.
Total Current Liabilities was $681 Mil.
Long-Term Debt was $0 Mil.
Net Income was 88.092 + 132.383 + 119.299 + 137.753 = $478 Mil.
Non Operating Income was -3.684 + -0.577 + 32.583 + -0.526 = $28 Mil.
Cash Flow from Operations was 129.387 + 158.336 + 137.835 + -97.359 = $328 Mil.
Accounts Receivable was $426 Mil.
Revenue was 585.394 + 803.306 + 706.283 + 777.848 = $2,873 Mil.
Gross Profit was 344.122 + 430.848 + 398.246 + 444.485 = $1,618 Mil.
Total Current Assets was $2,500 Mil.
Total Assets was $4,543 Mil.
Property, Plant and Equipment(Net PPE) was $436 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $531 Mil.
Total Current Liabilities was $824 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)
=(408.283 / 2858.917) / (425.65 / 2872.831)
=0.14281037 / 0.14816395
=0.9639

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)
=(413.143 / 2872.831) / (339.85 / 2858.917)
=0.56310343 / 0.53671827
=1.0492

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 - (2129.133 + 448.967) / 4410.324) / (1 - (2500.307 + 436.104) / 4543.279)
=0.41543977 / 0.35368024
=1.1746

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
=2858.917 / 2872.831
=0.9952

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))
=(77.467 / (77.467 + 436.104)) / (79.689 / (79.689 + 448.967))
=0.1508399 / 0.15073885
=1.0007

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)
=(563.502 / 2858.917) / (530.787 / 2872.831)
=0.19710331 / 0.18476096
=1.0668

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 + 680.72) / 4410.324) / ((0 + 824.261) / 4543.279)
=0.15434694 / 0.18142425
=0.8508

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
=(477.527 - 27.796 - 328.199) / 4410.324
=0.0276

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 -2.25 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.36721.31670.70841.39830.93640.79271.00950.9650.92590.9488
GMI 1.04671.08111.03480.90720.97921.03150.91610.99060.95671.0244
AQI 0.89680.70640.96861.50451.0291.24251.17480.98540.97421.0972
SGI 1.72611.79271.09870.84330.91291.02550.98450.96911.09070.9824
DEPI 1.30011.030.97590.83470.99030.98051.02161.13291.05281.0149
SGAI 1.01851.0311.11431.02541.12851.09641.06240.95031.01531.1031
LVGI 1.24131.36760.67031.09720.93621.14440.98270.98361.18660.8742
TATA 0.07810.0437-0.05-0.1018-0.0258-0.0669-0.0265-0.0127-0.03320.0417
M-score -1.19-1.47-2.80-2.63-2.74-2.91-2.59-2.58-2.71-2.27

Garmin Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.9650.95150.9910.940.92590.930.97340.89750.94880.9639
GMI 0.99060.97580.94710.94650.95670.96770.99241.0131.02441.0492
AQI 0.98541.0090.95640.95470.97420.86650.99981.00621.09721.1746
SGI 0.96910.99711.03561.07061.09071.07071.03781.00540.98240.9952
DEPI 1.13291.12611.07081.21951.05281.02541.01880.951.01491.0007
SGAI 0.95030.94470.96680.9641.01531.04561.08881.11331.10311.0668
LVGI 0.98361.11111.05661.19141.18661.23331.06360.84730.87420.8508
TATA -0.0127-0.01330.0073-0.0456-0.0332-0.03580.0080.05950.04170.0276
M-score -2.58-2.61-2.47-2.76-2.71-2.80-2.47-2.26-2.27-2.25
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