Switch to:
Harley-Davidson Inc (NYSE:HOG)
Beneish M-Score
-2.46 (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 -2.46 suggests that the company is not a manipulator.

HOG' s 10-Year Beneish M-Score Range
Min: -3.67   Max: -0.89
Current: -2.46

-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 -2.62.


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 * 1.0558+0.528 * 0.9709+0.404 * 1.0527+0.892 * 1.082+0.115 * 1.015
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9419+4.679 * -0.0303-0.327 * 0.9507
=-2.46

* 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 $290 Mil.
Revenue was 2000.699 + 1726.048 + 1190.634 + 1343.718 = $6,261 Mil.
Gross Profit was 849.812 + 707.634 + 443.6 + 539.805 = $2,541 Mil.
Total Current Assets was $4,374 Mil.
Total Assets was $10,076 Mil.
Property, Plant and Equipment(Net PPE) was $826 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $1,137 Mil.
Total Current Liabilities was $2,454 Mil.
Long-Term Debt was $3,794 Mil.
Net Income was 354.153 + 265.917 + 75.409 + 162.716 = $858 Mil.
Non Operating Income was 0 + 0 + 5.859 + 0 = $6 Mil.
Cash Flow from Operations was 367.006 + 203.586 + 151.99 + 435.426 = $1,158 Mil.
Accounts Receivable was $254 Mil.
Revenue was 1794.307 + 1571.213 + 1170.86 + 1250.295 = $5,787 Mil.
Gross Profit was 719.205 + 635.853 + 432.128 + 492.7 = $2,280 Mil.
Total Current Assets was $4,454 Mil.
Total Assets was $9,707 Mil.
Property, Plant and Equipment(Net PPE) was $791 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $1,115 Mil.
Total Current Liabilities was $2,097 Mil.
Long-Term Debt was $4,234 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)
=(289.94 / 6261.099) / (253.819 / 5786.675)
=0.04630816 / 0.04386267
=1.0558

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)
=(707.634 / 5786.675) / (849.812 / 6261.099)
=0.39398895 / 0.4058155
=0.9709

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 - (4373.698 + 826.467) / 10076.296) / (1 - (4454.471 + 790.563) / 9707.198)
=0.48392098 / 0.4596758
=1.0527

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
=6261.099 / 5786.675
=1.082

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))
=(166.001 / (166.001 + 790.563)) / (170.438 / (170.438 + 826.467))
=0.17353883 / 0.17096714
=1.015

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)
=(1136.578 / 6261.099) / (1115.217 / 5786.675)
=0.18153011 / 0.19272155
=0.9419

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)
=((3794.396 + 2453.648) / 10076.296) / ((4234.352 + 2096.689) / 9707.198)
=0.62007349 / 0.65220067
=0.9507

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
=(858.195 - 5.859 - 1158.008) / 10076.296
=-0.0303

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 -2.46 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.99530.94461.07911.28321.40791.26440.95850.76370.99981.0733
GMI 0.9510.99160.99231.04270.95251.16020.88331.01660.96010.9775
AQI 0.60661.47790.82771.15340.79712.68281.13040.92631.05051.0361
SGI 1.08451.06521.08580.98731.03990.8031.01621.09311.05061.0572
DEPI 0.91641.02280.97881.06940.93430.74570.9191.31951.11321.0372
SGAI 0.97750.87191.02281.07791.13191.15051.02520.95120.9970.9592
LVGI 1.08940.99071.25051.14441.2021.1370.9940.97610.9470.9838
TATA -0.0305-0.02260.02740.02010.1694-0.0648-0.0912-0.0296-0.0202-0.0265
M-score -2.77-2.36-2.36-2.10-1.48-2.05-2.95-2.72-2.50-2.47

Harley-Davidson Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.78490.83260.83650.99980.94731.00611.07741.07331.18271.0558
GMI 0.99170.98630.96070.96010.96560.9640.97350.97750.98180.9709
AQI 0.94940.98240.96021.05051.00770.95811.07791.03611.03561.0527
SGI 1.13111.13141.07341.05061.03731.0081.05121.05721.05811.082
DEPI 1.19021.12381.00411.11321.10811.11731.14651.03721.03941.015
SGAI 0.94770.93730.97480.99690.98580.99910.9710.95920.95750.9419
LVGI 0.97130.97440.99510.9470.96850.99330.9430.98380.95880.9507
TATA -0.02760.0006-0.0039-0.0204-0.0107-0.0216-0.0203-0.0265-0.0534-0.0303
M-score -2.67-2.49-2.61-2.50-2.54-2.59-2.40-2.47-2.48-2.46
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)
Free 7-day Trial
FEEDBACK