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Harley-Davidson Inc (NYSE:HOG)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

HOG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.47   Max: -1.47
Current: -2.7

-3.47
-1.47

During the past 13 years, the highest Beneish M-Score of Harley-Davidson Inc was -1.47. The lowest was -3.47. And the median was -2.65.


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 * 1.038+0.528 * 1.009+0.404 * 1.0285+0.892 * 0.9626+0.115 * 0.9718
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0583+4.679 * -0.0353-0.327 * 1.178
=-2.70

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $247 Mil.
Revenue was 1180.635 + 1317.43 + 1824.392 + 1672.945 = $5,995 Mil.
Gross Profit was 381.789 + 529.934 + 779.635 + 714.114 = $2,405 Mil.
Total Current Assets was $3,983 Mil.
Total Assets was $9,991 Mil.
Property, Plant and Equipment(Net PPE) was $942 Mil.
Depreciation, Depletion and Amortization(DDA) was $198 Mil.
Selling, General & Admin. Expense(SGA) was $1,181 Mil.
Total Current Liabilities was $2,753 Mil.
Long-Term Debt was $4,845 Mil.
Net Income was 42.196 + 140.347 + 299.81 + 269.854 = $752 Mil.
Non Operating Income was 0.602 + 3.211 + 1.45 + 0 = $5 Mil.
Cash Flow from Operations was 79.161 + 407.013 + 439.244 + 174.7 = $1,100 Mil.
Accounts Receivable was $248 Mil.
Revenue was 1200.157 + 1301.604 + 2000.699 + 1726.048 = $6,229 Mil.
Gross Profit was 438.48 + 525.505 + 849.812 + 707.634 = $2,521 Mil.
Total Current Assets was $3,948 Mil.
Total Assets was $9,528 Mil.
Property, Plant and Equipment(Net PPE) was $883 Mil.
Depreciation, Depletion and Amortization(DDA) was $179 Mil.
Selling, General & Admin. Expense(SGA) was $1,160 Mil.
Total Current Liabilities was $2,389 Mil.
Long-Term Debt was $3,762 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)
=(247.405 / 5995.402) / (247.621 / 6228.508)
=0.04126579 / 0.03975607
=1.038

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)
=(529.934 / 6228.508) / (381.789 / 5995.402)
=0.40482103 / 0.40121947
=1.009

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 - (3983.154 + 942.418) / 9991.167) / (1 - (3948.095 + 883.077) / 9528.097)
=0.50700734 / 0.4929552
=1.0285

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
=5995.402 / 6228.508
=0.9626

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))
=(179.3 / (179.3 + 883.077)) / (198.074 / (198.074 + 942.418))
=0.16877248 / 0.17367417
=0.9718

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)
=(1181.122 / 5995.402) / (1159.502 / 6228.508)
=0.19700464 / 0.18616047
=1.0583

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)
=((4845.388 + 2752.578) / 9991.167) / ((3761.528 + 2389.286) / 9528.097)
=0.76046832 / 0.64554486
=1.178

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
=(752.207 - 5.263 - 1100.118) / 9991.167
=-0.0353

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 -2.70 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 1.01191.36831.49881.18780.95850.76370.99981.07330.89851.038
GMI 0.96691.07011.06960.87741.04021.01660.96010.97750.97911.0871
AQI 0.82771.15340.79712.68281.13040.92631.05051.03611.01371.0285
SGI 1.15790.92580.97690.85481.01621.09311.05061.05721.05570.9626
DEPI 0.97881.06940.86570.8730.84721.31951.06181.08740.94391.0095
SGAI 0.95311.15671.1191.16371.02520.95120.9970.95920.97470.9649
LVGI 1.25051.14441.2021.1370.9940.97610.9470.98381.02451.178
TATA 0.04690.04040.1699-0.0652-0.0912-0.0296-0.0194-0.0265-0.0317-0.0355
M-score -2.27-1.99-1.39-2.21-2.88-2.72-2.50-2.46-2.69-2.64

Harley-Davidson Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.07331.18271.05580.93280.89850.84630.99911.06211.0381.131
GMI 0.97750.98180.97090.97410.97910.97250.99060.99251.0091.0632
AQI 1.03611.03561.05271.02841.01370.97510.97710.97941.02851.253
SGI 1.05721.05811.0821.05761.05571.01990.95820.96720.96260.9833
DEPI 1.08741.08951.08771.02790.98060.98160.95380.97950.97180.1724
SGAI 0.95740.95570.94020.95430.97651.00751.08251.07211.05831.0173
LVGI 0.98380.95880.95070.98211.02451.06431.08121.1481.1781.1493
TATA -0.0265-0.0534-0.0305-0.0282-0.0322-0.0267-0.0379-0.0394-0.0353-0.0229
M-score -2.46-2.47-2.46-2.61-2.69-2.78-2.76-2.71-2.70-2.49
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