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ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-1.84 (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 -1.83 signals that the company is a manipulator.

ORBC' s 10-Year Beneish M-Score Range
Min: -3.25   Max: 16.91
Current: -1.84

-3.25
16.91

During the past 13 years, the highest Beneish M-Score of ORBCOMM Inc was 16.91. The lowest was -3.25. And the median was -2.58.


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 * 1.0392+0.528 * 1.1165+0.404 * 2.1347+0.892 * 1.1761+0.115 * 0.9647
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0002+4.679 * -0.0226-0.327 * 0.8719
=-1.83

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $15.77 Mil.
Revenue was 19.35 + 19.24 + 19.693 + 18.559 = $76.84 Mil.
Gross Profit was 10.253 + 9.002 + 9.358 + 9.01 = $37.62 Mil.
Total Current Assets was $100.13 Mil.
Total Assets was $311.81 Mil.
Property, Plant and Equipment(Net PPE) was $136.54 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.54 Mil.
Selling, General & Admin. Expense(SGA) was $26.57 Mil.
Total Current Liabilities was $18.25 Mil.
Long-Term Debt was $46.57 Mil.
Net Income was -0.431 + 0.819 + 0.986 + 1.686 = $3.06 Mil.
Non Operating Income was -0.016 + -0.009 + 0.041 + 0.352 = $0.37 Mil.
Cash Flow from Operations was 0.639 + 3.303 + 3.296 + 2.507 = $9.75 Mil.
Accounts Receivable was $12.90 Mil.
Revenue was 16.72 + 16.206 + 16.094 + 16.319 = $65.34 Mil.
Gross Profit was 9.88 + 8.385 + 8.651 + 8.801 = $35.72 Mil.
Total Current Assets was $108.53 Mil.
Total Assets was $247.86 Mil.
Property, Plant and Equipment(Net PPE) was $111.35 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.14 Mil.
Selling, General & Admin. Expense(SGA) was $22.59 Mil.
Total Current Liabilities was $14.10 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)
=(15.769 / 76.842) / (12.903 / 65.339)
=0.20521329 / 0.19747777
=1.0392

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)
=(9.002 / 65.339) / (10.253 / 76.842)
=0.54664136 / 0.48961505
=1.1165

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 - (100.127 + 136.544) / 311.813) / (1 - (108.529 + 111.352) / 247.862)
=0.24098418 / 0.11288943
=2.1347

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
=76.842 / 65.339
=1.1761

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))
=(5.138 / (5.138 + 111.352)) / (6.542 / (6.542 + 136.544))
=0.04410679 / 0.04572076
=0.9647

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)
=(26.57 / 76.842) / (22.589 / 65.339)
=0.34577445 / 0.34572001
=1.0002

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)
=((46.571 + 18.245) / 311.813) / ((45 + 14.095) / 247.862)
=0.20786818 / 0.23841896
=0.8719

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
=(3.06 - 0.368 - 9.745) / 311.813
=-0.0226

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 -1.83 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 0.52080.92490.88761.14360.6040.95391.38750.9671.1448
GMI 0.03061.20970.42290.637837.30440.02461.18940.98041.0753
AQI 1.23440.90670.76821.55020.86780.82772.50291.1561.1375
SGI 1.4291.57921.14810.97011.00941.33051.26261.39291.1506
DEPI 1.43992.7271.62561.40070.15983.6450.96391.26671.0778
SGAI 0.75631.06610.97931.10031.42090.46430.94870.78311.039
LVGI 0.41510.61461.38811.02040.710.89081.66680.912.2863
TATA -0.1313-0.0177-0.0406-0.0399-0.0371-0.0501-0.0311-0.0308-0.0173
M-score -3.29-1.73-3.09-2.5116.03-2.61-1.54-2.15-2.62

ORBCOMM Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.38751.13840.89210.90320.9671.13841.07730.99051.14481.0392
GMI 1.18941.19111.15150.96320.98040.93670.9731.02821.04731.1165
AQI 2.50293.50691.20621.16251.1560.84181.07011.12091.13752.1347
SGI 1.26261.4621.49111.54371.39291.20331.12991.14871.15061.1761
DEPI 0.96390.95871.11421.41651.26671.2611.22321.06061.07780.9647
SGAI 0.9490.84410.83370.76390.78280.89550.9570.98071.02771.0002
LVGI 1.66681.47920.99361.4750.912.54632.54171.78392.28630.8719
TATA -0.0311-0.0318-0.0329-0.0236-0.0308-0.0181-0.0162-0.0191-0.0173-0.0226
M-score -1.54-1.11-2.09-2.22-2.15-2.81-2.83-2.63-2.63-1.83
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