Switch to:
ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

ORBC' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 17.3
Current: -2.16

-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 -2.37.


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 * 1.2686+0.528 * 1.109+0.404 * 0.9858+0.892 * 1.2969+0.115 * 0.7613
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9733+4.679 * -0.0108-0.327 * 1.5304
=-2.16

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $23.19 Mil.
Revenue was 29.468 + 23.126 + 24.298 + 19.35 = $96.24 Mil.
Gross Profit was 11.873 + 12.311 + 13.121 + 10.253 = $47.56 Mil.
Total Current Assets was $252.56 Mil.
Total Assets was $506.55 Mil.
Property, Plant and Equipment(Net PPE) was $180.62 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.86 Mil.
Selling, General & Admin. Expense(SGA) was $30.99 Mil.
Total Current Liabilities was $32.61 Mil.
Long-Term Debt was $151.39 Mil.
Net Income was -5.623 + -0.033 + 1.403 + -0.431 = $-4.68 Mil.
Non Operating Income was -2.516 + 0.062 + 0.061 + -0.016 = $-2.41 Mil.
Cash Flow from Operations was -2.682 + 4.506 + 0.739 + 0.639 = $3.20 Mil.
Accounts Receivable was $14.10 Mil.
Revenue was 19.24 + 19.693 + 18.559 + 16.72 = $74.21 Mil.
Gross Profit was 10.265 + 10.486 + 10.039 + 9.88 = $40.67 Mil.
Total Current Assets was $90.03 Mil.
Total Assets was $261.47 Mil.
Property, Plant and Equipment(Net PPE) was $133.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.00 Mil.
Selling, General & Admin. Expense(SGA) was $24.55 Mil.
Total Current Liabilities was $15.49 Mil.
Long-Term Debt was $46.57 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)
=(23.194 / 96.242) / (14.098 / 74.212)
=0.24099665 / 0.18996928
=1.2686

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)
=(12.311 / 74.212) / (11.873 / 96.242)
=0.54802458 / 0.49415016
=1.109

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 - (252.556 + 180.621) / 506.548) / (1 - (90.029 + 133.028) / 261.474)
=0.14484511 / 0.14692474
=0.9858

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
=96.242 / 74.212
=1.2969

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))
=(6.001 / (6.001 + 133.028)) / (10.856 / (10.856 + 180.621))
=0.04316366 / 0.0566961
=0.7613

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)
=(30.989 / 96.242) / (24.551 / 74.212)
=0.3219904 / 0.33082251
=0.9733

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)
=((151.389 + 32.611) / 506.548) / ((46.571 + 15.489) / 261.474)
=0.36324297 / 0.23734673
=1.5304

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
=(-4.684 - -2.409 - 3.202) / 506.548
=-0.0108

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 -2.16 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92490.88760.66571.03770.95391.38750.9671.14481.2686
GMI 1.20970.42290.637837.30440.02461.18940.98040.95931.109
AQI 0.90670.76821.55020.86780.82772.50291.1561.13750.9858
SGI 1.57921.14810.97011.00941.33051.26261.39291.15061.2969
DEPI 2.7271.62561.40070.15983.6450.96391.26671.07780.7613
SGAI 1.06610.97931.10031.42090.46430.94870.78310.97640.9733
LVGI 0.61461.38811.02040.710.89081.66680.912.28631.5304
TATA -0.0177-0.0406-0.0399-0.0371-0.0501-0.0311-0.0308-0.0173-0.0108
M-score -1.73-3.09-2.9516.43-2.61-1.54-2.15-2.67-2.16

ORBCOMM Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.90320.9671.13841.07730.99051.14481.03921.1331.06161.2686
GMI 0.96320.98040.93670.94590.9710.95931.02341.02341.02011.109
AQI 1.16251.1560.84181.07011.12091.13752.13471.62111.62510.9858
SGI 1.54371.39291.20331.12991.14871.15061.17611.2221.20841.2969
DEPI 1.41651.26671.2611.22321.06061.07780.96471.02030.95530.7613
SGAI 0.76390.78280.89550.94390.95060.97640.95160.95351.01720.9733
LVGI 1.4750.912.54632.54171.78392.28630.87190.91960.93051.5304
TATA -0.0236-0.0308-0.0181-0.0162-0.0191-0.0173-0.0226-0.0165-0.0231-0.0108
M-score -2.22-2.15-2.81-2.84-2.65-2.67-1.88-1.94-2.07-2.16
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)
FEEDBACK