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Harley-Davidson Inc (NYSE:HOG)
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.

Harley-Davidson Inc has a M-score of -2.47 suggests that the company is not a manipulator.

HOG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.47   Max: -0.86
Current: -2.47

-3.47
-0.86

During the past 13 years, the highest Beneish M-Score of Harley-Davidson Inc was -0.86. The lowest was -3.47. And the median was -2.61.


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 * 1.1672+0.528 * 1.0201+0.404 * 1.0343+0.892 * 1.0086+0.115 * 0.987
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0538+4.679 * -0.0317-0.327 * 1.0518
=-2.47

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $346 Mil.
Revenue was 1274.813 + 1861.077 + 1749.968 + 1180.635 = $6,066 Mil.
Gross Profit was 507.629 + 755.627 + 717.719 + 453.452 = $2,434 Mil.
Total Current Assets was $4,102 Mil.
Total Assets was $10,212 Mil.
Property, Plant and Equipment(Net PPE) was $954 Mil.
Depreciation, Depletion and Amortization(DDA) was $211 Mil.
Selling, General & Admin. Expense(SGA) was $1,258 Mil.
Total Current Liabilities was $2,554 Mil.
Long-Term Debt was $5,171 Mil.
Net Income was 114.065 + 280.431 + 250.489 + 42.196 = $687 Mil.
Non Operating Income was 2.3 + 0.688 + 0.766 + 0.602 = $4 Mil.
Cash Flow from Operations was 471.519 + 415.159 + 41.131 + 79.161 = $1,007 Mil.
Accounts Receivable was $294 Mil.
Revenue was 1317.43 + 1824.392 + 1672.945 + 1200.157 = $6,015 Mil.
Gross Profit was 529.934 + 779.635 + 714.114 + 438.48 = $2,462 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 $191 Mil.
Selling, General & Admin. Expense(SGA) was $1,184 Mil.
Total Current Liabilities was $2,663 Mil.
Long-Term Debt was $5,054 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)
=(346.176 / 6066.493) / (294.054 / 6014.924)
=0.05706361 / 0.0488874
=1.1672

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)
=(2462.163 / 6014.924) / (2434.427 / 6066.493)
=0.40934233 / 0.40129066
=1.0201

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 - (4102.344 + 954.475) / 10212.226) / (1 - (4616.041 + 877.787) / 10731.558)
=0.50482696 / 0.488068
=1.0343

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
=6066.493 / 6014.924
=1.0086

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))
=(190.636 / (190.636 + 877.787)) / (210.615 / (210.615 + 954.475))
=0.17842746 / 0.18077144
=0.987

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)
=(1257.859 / 6066.493) / (1183.548 / 6014.924)
=0.20734533 / 0.19676857
=1.0538

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)
=((5170.609 + 2553.707) / 10212.226) / ((5054.347 + 2663.005) / 10731.558)
=0.75637927 / 0.7191269
=1.0518

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
=(687.181 - 4.356 - 1006.97) / 10212.226
=-0.0317

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 -2.47 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 local exchange's currency.

Harley-Davidson Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.07911.28321.40791.26440.95850.76370.99981.07330.89851.038
GMI 0.99231.04270.95251.16020.88331.01660.96010.97750.97910.9798
AQI 0.82771.15340.79712.68281.13040.92631.05051.03611.01371.0278
SGI 1.08580.98731.03990.8031.01621.09311.05061.05721.05570.9626
DEPI 0.97881.06940.93430.74570.9191.38341.01281.08740.98060.9718
SGAI 1.02281.07791.13191.15051.02520.95120.9970.95740.97651.0932
LVGI 1.25051.14441.2021.1370.9940.97610.9470.98381.02451.1773
TATA 0.06540.02010.1694-0.0648-0.0912-0.0304-0.0194-0.0265-0.0324-0.0355
M-score -2.19-2.10-1.48-2.05-2.95-2.72-2.51-2.46-2.69-2.72

Harley-Davidson Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.05580.93280.89850.84630.99911.06211.0381.1311.10361.1672
GMI 0.97090.97410.97910.97250.99060.99250.97981.0021.01881.0201
AQI 1.05271.02841.01370.97460.97670.97941.02781.05791.031.0343
SGI 1.0821.05761.05571.01990.95820.96720.96260.98331.01831.0086
DEPI 1.08771.02790.98060.98160.95380.97950.97180.96810.98830.987
SGAI 0.94020.95430.97651.00751.08251.07211.09321.08121.04491.0538
LVGI 0.95070.98211.02451.06351.08041.1481.17731.15021.12811.0518
TATA -0.0305-0.0282-0.0322-0.0269-0.0381-0.0395-0.0355-0.0229-0.0226-0.0317
M-score -2.46-2.61-2.69-2.78-2.76-2.71-2.72-2.52-2.50-2.47
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