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Garmin Ltd (NAS:GRMN)
Beneish M-Score
-2.54 (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 -2.54 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: -2.54

-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 -2.37.


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 * 1.0067+0.528 * 1.0189+0.404 * 1.075+0.892 * 1.0097+0.115 * 0.9668
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0289+4.679 * -0.0216-0.327 * 1.0265
=-2.54

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $510 Mil.
Revenue was 811.609 + 624.04 + 781.357 + 679.69 = $2,897 Mil.
Gross Profit was 462.958 + 339.85 + 413.143 + 362.19 = $1,578 Mil.
Total Current Assets was $2,213 Mil.
Total Assets was $4,528 Mil.
Property, Plant and Equipment(Net PPE) was $451 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $568 Mil.
Total Current Liabilities was $1,010 Mil.
Long-Term Debt was $0 Mil.
Net Income was 161.064 + 88.092 + 132.383 + 119.299 = $501 Mil.
Non Operating Income was -5.328 + -3.684 + -0.577 + 32.583 = $23 Mil.
Cash Flow from Operations was 149.985 + 129.387 + 158.336 + 137.835 = $576 Mil.
Accounts Receivable was $502 Mil.
Revenue was 773.83 + 585.394 + 803.306 + 706.283 = $2,869 Mil.
Gross Profit was 419.25 + 344.122 + 430.848 + 398.246 = $1,592 Mil.
Total Current Assets was $2,283 Mil.
Total Assets was $4,423 Mil.
Property, Plant and Equipment(Net PPE) was $446 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $547 Mil.
Total Current Liabilities was $962 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)
=(510.309 / 2896.696) / (502.034 / 2868.813)
=0.17616933 / 0.17499712
=1.0067

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)
=(1592.466 / 2868.813) / (1578.141 / 2896.696)
=0.55509578 / 0.54480726
=1.0189

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 - (2212.587 + 450.654) / 4527.583) / (1 - (2283.296 + 445.672) / 4423.409)
=0.41177423 / 0.38306225
=1.075

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
=2896.696 / 2868.813
=1.0097

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))
=(77.687 / (77.687 + 445.672)) / (81.739 / (81.739 + 450.654))
=0.14843922 / 0.15353132
=0.9668

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)
=(568.085 / 2896.696) / (546.806 / 2868.813)
=0.19611481 / 0.19060357
=1.0289

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 + 1010.429) / 4527.583) / ((0 + 961.681) / 4423.409)
=0.22317183 / 0.21740721
=1.0265

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
=(500.838 - 22.994 - 575.543) / 4527.583
=-0.0216

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 -2.54 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.95150.9910.940.92590.930.97340.89750.94880.96391.0067
GMI 0.97580.94710.94650.95670.96770.99241.0131.02441.04921.0189
AQI 1.0090.95640.95470.97420.86650.99981.00621.09721.17461.075
SGI 0.99711.03561.07061.09071.07071.03781.00540.98240.99521.0097
DEPI 1.12611.07081.21951.05281.02541.01880.951.01491.00070.9668
SGAI 0.94470.96680.9641.01531.04561.08881.11331.10311.06681.0289
LVGI 1.11111.05661.19141.18661.23331.06360.84730.87420.85081.0265
TATA -0.01330.0073-0.0456-0.0332-0.03580.0080.05950.04170.0276-0.0216
M-score -2.61-2.47-2.76-2.71-2.80-2.47-2.26-2.27-2.25-2.54
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