Switch to:
Harley-Davidson Inc (NYSE:HOG)
Beneish M-Score
-2.75 (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.

Harley-Davidson Inc has a M-score of -2.75 suggests that the company is not a manipulator.

HOG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.67   Max: -0.89
Current: -2.75

-3.67
-0.89

During the past 13 years, the highest Beneish M-Score of Harley-Davidson Inc was -0.89. The lowest was -3.67. And the median was -2.64.


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 Harley-Davidson Inc 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 * 1.0728+0.528 * 0.9856+0.404 * 0.9794+0.892 * 0.9575+0.115 * 0.9868
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0742+4.679 * -0.0462-0.327 * 1.148
=-2.75

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $294 Mil.
Revenue was 1317.43 + 1824.392 + 1672.945 + 0 = $4,815 Mil.
Gross Profit was 529.934 + 779.635 + 714.114 + 0 = $2,024 Mil.
Total Current Assets was $4,616 Mil.
Total Assets was $10,732 Mil.
Property, Plant and Equipment(Net PPE) was $878 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $867 Mil.
Total Current Liabilities was $2,663 Mil.
Long-Term Debt was $5,054 Mil.
Net Income was 140.347 + 299.81 + 269.854 + 0 = $710 Mil.
Non Operating Income was 3.211 + 1.45 + 0 + 0 = $5 Mil.
Cash Flow from Operations was 407.013 + 439.244 + 174.7 + 179.809 = $1,201 Mil.
Accounts Receivable was $286 Mil.
Revenue was 1301.604 + 2000.699 + 1726.048 + 0 = $5,028 Mil.
Gross Profit was 525.505 + 849.812 + 707.634 + 0 = $2,083 Mil.
Total Current Assets was $4,202 Mil.
Total Assets was $10,026 Mil.
Property, Plant and Equipment(Net PPE) was $827 Mil.
Depreciation, Depletion and Amortization(DDA) was $184 Mil.
Selling, General & Admin. Expense(SGA) was $843 Mil.
Total Current Liabilities was $2,707 Mil.
Long-Term Debt was $3,573 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)
=(294.054 / 4814.767) / (286.256 / 5028.351)
=0.06107336 / 0.0569284
=1.0728

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)
=(779.635 / 5028.351) / (529.934 / 4814.767)
=0.41424137 / 0.42030757
=0.9856

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 - (4616.041 + 877.787) / 10731.558) / (1 - (4202.478 + 826.764) / 10025.506)
=0.488068 / 0.49835529
=0.9794

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
=4814.767 / 5028.351
=0.9575

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))
=(184.478 / (184.478 + 826.764)) / (199.078 / (199.078 + 877.787))
=0.18242715 / 0.18486811
=0.9868

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)
=(866.558 / 4814.767) / (842.512 / 5028.351)
=0.17997922 / 0.16755234
=1.0742

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)
=((5054.347 + 2663.005) / 10731.558) / ((3573.118 + 2707.044) / 10025.506)
=0.7191269 / 0.62641846
=1.148

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
=(710.011 - 4.661 - 1200.766) / 10731.558
=-0.0462

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.

Harley-Davidson Inc has a M-score of -2.75 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.

Harley-Davidson Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.07911.28321.40791.26440.95850.76370.99981.07330.89851
GMI 0.99231.04270.95251.16020.88331.01660.96010.97750.97911
AQI 0.82771.15340.79712.68281.13040.92631.05051.03611.01371
SGI 1.08580.98731.03990.8031.01621.09311.05061.05721.05571
DEPI 0.97881.06940.93430.74570.9191.31951.11320.99120.98771
SGAI 1.02281.07791.13191.15051.02520.95120.9970.95920.97471
LVGI 1.25051.14441.2021.1370.9940.97610.9470.98381.02451
TATA 0.02740.02010.1694-0.0648-0.0912-0.0296-0.0202-0.0258-0.0317-0.0317
M-score -2.36-2.10-1.48-2.05-2.95-2.72-2.50-2.47-2.68-2.63

Harley-Davidson Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.06051.06251.1711.03990.92390.88830.84381.01151.07280.838
GMI 0.9750.9750.98050.96780.97130.97130.96270.9830.98561.0325
AQI 1.07791.03611.03561.05271.02841.01370.97510.97710.97941.2199
SGI 1.06791.06791.06881.09851.06781.06781.02290.94640.95751.1923
DEPI 1.14650.99120.99360.99060.93810.98770.98910.96240.98680.1753
SGAI 0.95920.95920.95720.93880.95540.95540.9931.0871.07421.1758
LVGI 0.9430.98380.95880.95070.98211.02451.06431.08121.1481.178
TATA -0.0269-0.0339-0.0605-0.0374-0.0351-0.0399-0.0338-0.0448-0.0462-0.0353
M-score -2.43-2.51-2.52-2.50-2.65-2.72-2.81-2.79-2.75-2.70
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK