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ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-1.66 (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.

ORBCOMM Inc has a M-score of -1.66 signals that the company is a manipulator.

ORBC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.09   Max: 17.3
Current: -1.66

-3.09
17.3

During the past 13 years, the highest Beneish M-Score of ORBCOMM Inc was 17.30. The lowest was -3.09. And the median was -2.18.


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 ORBCOMM 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 * 0.6939+0.528 * 1.0038+0.404 * 2.7801+0.892 * 1.8525+0.115 * 0.5474
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7733+4.679 * -0.0753-0.327 * 1.0305
=-1.66

* 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 $29.8 Mil.
Revenue was 44.996 + 46.084 + 44.883 + 42.33 = $178.3 Mil.
Gross Profit was 23.424 + 21.894 + 21.775 + 20.678 = $87.8 Mil.
Total Current Assets was $84.8 Mil.
Total Assets was $526.9 Mil.
Property, Plant and Equipment(Net PPE) was $230.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.6 Mil.
Selling, General & Admin. Expense(SGA) was $44.4 Mil.
Total Current Liabilities was $45.7 Mil.
Long-Term Debt was $150.0 Mil.
Net Income was 0.239 + 1.591 + -12.208 + -2.873 = $-13.3 Mil.
Non Operating Income was 0.032 + -0.085 + 0.204 + 0.188 = $0.3 Mil.
Cash Flow from Operations was 14.898 + 3.85 + 2.516 + 4.819 = $26.1 Mil.
Accounts Receivable was $23.2 Mil.
Revenue was 29.468 + 23.126 + 24.298 + 19.35 = $96.2 Mil.
Gross Profit was 11.873 + 12.311 + 13.121 + 10.253 = $47.6 Mil.
Total Current Assets was $252.6 Mil.
Total Assets was $506.5 Mil.
Property, Plant and Equipment(Net PPE) was $180.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.9 Mil.
Selling, General & Admin. Expense(SGA) was $31.0 Mil.
Total Current Liabilities was $32.6 Mil.
Long-Term Debt was $150.0 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)
=(29.816 / 178.293) / (23.194 / 96.242)
=0.16723035 / 0.24099665
=0.6939

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)
=(21.894 / 96.242) / (23.424 / 178.293)
=0.49415016 / 0.49228517
=1.0038

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 - (84.759 + 229.97) / 526.899) / (1 - (252.556 + 180.621) / 506.548)
=0.40267679 / 0.14484511
=2.7801

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
=178.293 / 96.242
=1.8525

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))
=(10.856 / (10.856 + 180.621)) / (26.571 / (26.571 + 229.97))
=0.0566961 / 0.10357409
=0.5474

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)
=(44.395 / 178.293) / (30.989 / 96.242)
=0.24900024 / 0.3219904
=0.7733

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)
=((150 + 45.733) / 526.899) / ((150 + 32.611) / 506.548)
=0.37148106 / 0.36050088
=1.0305

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
=(-13.251 - 0.339 - 26.083) / 526.899
=-0.0753

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.

ORBCOMM Inc has a M-score of -1.66 signals that the company is likely to 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.

ORBCOMM Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92490.88760.66571.03770.95391.38750.9671.14481.26860.6939
GMI 1.20970.42290.637837.30440.02461.18940.88381.06411.1091.0038
AQI 0.90670.76821.55020.86780.82772.50291.1561.13750.98582.7801
SGI 1.57921.14810.97011.00941.33051.26261.39291.15061.29691.8525
DEPI 2.7271.62561.40070.15983.6450.96391.26671.07780.76130.5474
SGAI 1.06610.97931.10031.42090.46430.94870.74311.0290.97330.7733
LVGI 0.61461.38811.02040.710.89081.66680.912.28631.51891.0305
TATA -0.0177-0.0406-0.0399-0.0371-0.0501-0.0311-0.0308-0.0173-0.0108-0.0753
M-score -1.73-3.09-2.9516.43-2.61-1.54-2.20-2.62-2.16-1.66

ORBCOMM Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.99051.14481.03921.1331.06161.26861.09850.94861.09160.6939
GMI 0.88641.06411.12961.1261.11761.1091.09821.1211.14081.0038
AQI 1.12091.13752.13471.62111.62510.98581.63651.72061.73622.7801
SGI 1.14871.15061.17611.2221.20841.29691.55151.6931.89231.8525
DEPI 1.06061.07780.96471.02030.95530.76130.60120.44180.40510.5474
SGAI 0.90671.0291.00111.00141.06640.97330.90830.83180.71610.7733
LVGI 1.78392.28630.87190.91960.93051.51891.72231.67941.56881.0305
TATA -0.0191-0.0173-0.026-0.0231-0.0231-0.0108-0.0212-0.0498-0.0493-0.0753
M-score -2.69-2.62-1.84-1.92-2.02-2.16-1.95-2.04-1.66-1.66
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