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Garmin Ltd (NAS:GRMN)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

GRMN' s 10-Year Beneish M-Score Range
Min: -3.31   Max: -1.19
Current: -2.47

-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 * 0.991+0.528 * 0.9471+0.404 * 0.9564+0.892 * 1.0356+0.115 * 1.1183
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9668+4.679 * 0.0073-0.327 * 1.0566
=-2.47

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $497 Mil.
Revenue was 777.848 + 583.221 + 759.695 + 643.637 = $2,764 Mil.
Gross Profit was 444.485 + 330.834 + 394.638 + 352.889 = $1,523 Mil.
Total Current Assets was $2,497 Mil.
Total Assets was $4,742 Mil.
Property, Plant and Equipment(Net PPE) was $428 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $484 Mil.
Total Current Liabilities was $969 Mil.
Long-Term Debt was $0 Mil.
Net Income was 181.983 + 118.818 + 163.585 + 187.669 = $652 Mil.
Non Operating Income was -19.704 + 12.33 + 22.309 + 0.616 = $16 Mil.
Cash Flow from Operations was 164.179 + 71.173 + 149.813 + 216.61 = $602 Mil.
Accounts Receivable was $484 Mil.
Revenue was 696.563 + 531.957 + 768.548 + 672.376 = $2,669 Mil.
Gross Profit was 383.64 + 276.133 + 373.854 + 359.055 = $1,393 Mil.
Total Current Assets was $2,346 Mil.
Total Assets was $4,599 Mil.
Property, Plant and Equipment(Net PPE) was $411 Mil.
Depreciation, Depletion and Amortization(DDA) was $81 Mil.
Selling, General & Admin. Expense(SGA) was $483 Mil.
Total Current Liabilities was $890 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)
=(496.979 / 2764.401) / (484.246 / 2669.444)
=0.17977819 / 0.18140332
=0.991

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)
=(330.834 / 2669.444) / (444.485 / 2764.401)
=0.52171239 / 0.55087739
=0.9471

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 - (2496.569 + 428.482) / 4741.802) / (1 - (2346.259 + 410.533) / 4599.181)
=0.38313515 / 0.40059067
=0.9564

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
=2764.401 / 2669.444
=1.0356

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))
=(81.326 / (81.326 + 410.533)) / (74.343 / (74.343 + 428.482))
=0.16534413 / 0.14785064
=1.1183

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)
=(483.934 / 2764.401) / (483.376 / 2669.444)
=0.17505926 / 0.18107741
=0.9668

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 + 969.25) / 4741.802) / ((0 + 889.735) / 4599.181)
=0.20440541 / 0.1934551
=1.0566

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
=(652.055 - 15.551 - 601.775) / 4741.802
=0.0073

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 -2.47 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 1.11581.01450.89680.70640.95291.53021.02841.25811.16030.9854
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 -2.07-1.90-1.19-1.47-2.81-2.62-2.74-2.91-2.59-2.36

Garmin Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.97470.93830.92141.00951.09281.06341.01161.19991.04690.991
GMI 0.99260.91010.91160.91610.92720.99740.9990.99060.97580.9471
AQI 1.081.19991.20631.16031.11941.06811.07810.98541.0090.9564
SGI 1.01471.05141.06330.98450.95860.93620.92440.96910.99711.0356
DEPI 0.95340.77310.85061.02161.08721.26011.09651.13291.14961.1183
SGAI 1.13391.12261.05551.06241.03610.98481.0040.95030.94470.9668
LVGI 1.15190.92630.90490.98270.96310.95721.05840.98361.11111.0566
TATA -0.0478-0.0352-0.0261-0.0265-0.0123-0.0184-0.0197-0.0127-0.01330.0073
M-score -2.76-2.65-2.58-2.59-2.46-2.49-2.61-2.36-2.52-2.47
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