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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 -2.47.


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 * 0.9734+0.528 * 0.9924+0.404 * 0.9998+0.892 * 1.0378+0.115 * 1.0188
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0888+4.679 * 0.008-0.327 * 1.0636
=-2.47

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 137.753 + 66.793 + 210.245 + -146.834 = $268 Mil.
Non Operating Income was -0.526 + -43.526 + 17.094 + -12.186 = $-39 Mil.
Cash Flow from Operations was -97.359 + 81.655 + 145.017 + 142.342 = $272 Mil.
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 $76 Mil.
Selling, General & Admin. Expense(SGA) was $484 Mil.
Total Current Liabilities was $969 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)
=(502.034 / 2868.813) / (496.979 / 2764.401)
=0.17499712 / 0.17977819
=0.9734

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)
=(344.122 / 2764.401) / (419.25 / 2868.813)
=0.55087739 / 0.55509578
=0.9924

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 - (2283.296 + 445.672) / 4423.409) / (1 - (2496.569 + 428.482) / 4741.802)
=0.38306225 / 0.38313515
=0.9998

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
=2868.813 / 2764.401
=1.0378

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))
=(76.344 / (76.344 + 428.482)) / (77.687 / (77.687 + 445.672))
=0.15122834 / 0.14843922
=1.0188

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)
=(546.806 / 2868.813) / (483.934 / 2764.401)
=0.19060357 / 0.17505926
=1.0888

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 + 961.681) / 4423.409) / ((0 + 969.25) / 4741.802)
=0.21740721 / 0.20440541
=1.0636

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
=(267.957 - -39.144 - 271.655) / 4423.409
=0.008

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.15211.36721.31670.70841.39830.93640.79271.00950.9650.9259
GMI 1.03591.04671.08111.03480.90720.97921.03150.91610.99060.9567
AQI 1.01450.89680.70640.96861.50451.0291.24251.17480.98540.9742
SGI 1.34781.72611.79271.09870.84330.91291.02550.98450.96911.0907
DEPI 0.85731.30011.030.97590.83470.99030.98051.02161.13291.0528
SGAI 1.47021.01851.0311.11431.02541.12851.09641.06240.95031.0153
LVGI 0.90971.24131.36760.67031.09720.93621.14440.98270.98361.1866
TATA 0.03620.07810.0437-0.05-0.1018-0.0258-0.0669-0.0265-0.0127-0.0332
M-score -1.90-1.19-1.47-2.80-2.63-2.74-2.91-2.59-2.58-2.71

Garmin Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.09281.06341.01160.9650.95150.9910.940.92590.930.9734
GMI 0.92720.99740.9990.99060.97580.94710.94650.95670.96770.9924
AQI 1.11941.06811.07810.98541.0090.95640.95470.97420.86650.9998
SGI 0.95860.93620.92440.96910.99711.03561.07061.09071.07071.0378
DEPI 1.09761.28661.06381.13291.12611.07081.21951.05281.02541.0188
SGAI 1.03610.98481.0040.95030.94470.96680.9641.01531.04561.0888
LVGI 0.96310.95721.05840.98361.11111.05661.19141.18661.23331.0636
TATA -0.0123-0.0184-0.0197-0.0127-0.01330.0073-0.0456-0.0332-0.03580.008
M-score -2.46-2.49-2.61-2.58-2.61-2.47-2.76-2.71-2.80-2.47
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