Switch to:
ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-2.02 (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 -2.02 signals that the company is a manipulator.

ORBC' s 10-Year Beneish M-Score Range
Min: -7020.55   Max: 4.48
Current: -2.02

-7020.55
4.48

During the past 13 years, the highest Beneish M-Score of ORBCOMM Inc was 4.48. The lowest was -7020.55. And the median was -2.66.


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 * 1.0616+0.528 * 1.1278+0.404 * 1.6251+0.892 * 1.2084+0.115 * 0.9369
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0711+4.679 * -0.0231-0.327 * 0.9305
=-2.02

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $16.68 Mil.
Revenue was 23.126 + 24.298 + 19.35 + 19.24 = $86.01 Mil.
Gross Profit was 12.311 + 13.121 + 10.253 + 5.878 = $41.56 Mil.
Total Current Assets was $73.57 Mil.
Total Assets was $326.54 Mil.
Property, Plant and Equipment(Net PPE) was $179.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.26 Mil.
Selling, General & Admin. Expense(SGA) was $31.30 Mil.
Total Current Liabilities was $29.36 Mil.
Long-Term Debt was $46.45 Mil.
Net Income was -0.033 + 1.403 + -0.431 + 0.819 = $1.76 Mil.
Non Operating Income was 0.062 + 0.061 + -0.016 + -0.009 = $0.10 Mil.
Cash Flow from Operations was 4.506 + 0.739 + 0.639 + 3.303 = $9.19 Mil.
Accounts Receivable was $13.00 Mil.
Revenue was 19.693 + 18.559 + 16.72 + 16.206 = $71.18 Mil.
Gross Profit was 10.486 + 10.039 + 9.88 + 8.385 = $38.79 Mil.
Total Current Assets was $96.70 Mil.
Total Assets was $262.30 Mil.
Property, Plant and Equipment(Net PPE) was $129.16 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.56 Mil.
Selling, General & Admin. Expense(SGA) was $24.19 Mil.
Total Current Liabilities was $20.44 Mil.
Long-Term Debt was $45.00 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)
=(16.679 / 86.014) / (13.001 / 71.178)
=0.19391029 / 0.18265475
=1.0616

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)
=(13.121 / 71.178) / (12.311 / 86.014)
=0.54497176 / 0.48321204
=1.1278

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 - (73.571 + 179.241) / 326.537) / (1 - (96.7 + 129.156) / 262.297)
=0.2257784 / 0.1389303
=1.6251

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
=86.014 / 71.178
=1.2084

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))
=(5.558 / (5.558 + 129.156)) / (8.257 / (8.257 + 179.241))
=0.04125778 / 0.0440378
=0.9369

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)
=(31.303 / 86.014) / (24.185 / 71.178)
=0.36392913 / 0.33978196
=1.0711

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)
=((46.446 + 29.358) / 326.537) / ((45 + 20.438) / 262.297)
=0.23214521 / 0.24948055
=0.9305

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
=(1.758 - 0.098 - 9.187) / 326.537
=-0.0231

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 -2.02 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.52080.92490.88760.66391.04040.95391.38750.9671.1448
GMI 0.03061.20970.42290.7631.30490.02461.18940.98041.0753
AQI 1.23440.90670.76821.48270.90730.82772.50291.1561.1375
SGI 1.4291.57921.14811.06890.91611.33051.26261.39291.1506
DEPI 1.43992.7271.62561.38220.16193.6450.96391.26671.0778
SGAI 0.75631.06610.97931.00110.99040.73220.94870.78311.039
LVGI 0.41510.61461.38811.02040.710.89081.77640.7942.4584
TATA -0.1313-0.0177-0.0406-0.0464-0.0371-0.0501-0.0311-0.0308-0.0173
M-score -3.29-1.73-3.09-2.8413.27-2.66-1.58-2.12-2.67

ORBCOMM Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.89210.90320.9671.13841.07730.99051.14481.03921.1331.0616
GMI 1.13910.95110.96980.93670.94590.9711.07531.14591.13641.1278
AQI 1.20621.16251.1560.84181.07011.12091.13752.13471.62111.6251
SGI 1.49111.54371.39291.20331.12991.14871.15061.17611.2221.2084
DEPI 1.09061.38321.26671.2611.27371.10741.07780.96471.00110.9369
SGAI 0.83560.76570.78460.89750.9420.94871.0371.00891.00871.0711
LVGI 0.99361.4750.7942.54632.54171.78392.45840.87190.91960.9305
TATA -0.0329-0.0236-0.0308-0.0181-0.0162-0.0191-0.0173-0.0226-0.0165-0.0231
M-score -2.10-2.23-2.12-2.81-2.83-2.65-2.67-1.82-1.89-2.02
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