Switch to:
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: -3.66   Max: 17.3
Current: -1.66

-3.66
17.3

During the past 13 years, the highest Beneish M-Score of ORBCOMM Inc was 17.30. The lowest was -3.66. And the median was -2.24.


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 * 1.0916+0.528 * 1.1408+0.404 * 1.7362+0.892 * 1.8923+0.115 * 0.4051
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7161+4.679 * -0.0493-0.327 * 1.5688
=-1.66

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $34.5 Mil.
Revenue was 46.084 + 44.883 + 42.33 + 29.468 = $162.8 Mil.
Gross Profit was 21.894 + 21.775 + 20.678 + 11.873 = $76.2 Mil.
Total Current Assets was $118.2 Mil.
Total Assets was $515.5 Mil.
Property, Plant and Equipment(Net PPE) was $195.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.8 Mil.
Selling, General & Admin. Expense(SGA) was $40.3 Mil.
Total Current Liabilities was $36.5 Mil.
Long-Term Debt was $151.3 Mil.
Net Income was 1.591 + -12.208 + -2.873 + -5.623 = $-19.1 Mil.
Non Operating Income was -0.085 + 0.204 + 0.188 + -2.516 = $-2.2 Mil.
Cash Flow from Operations was 3.85 + 2.516 + 4.819 + -2.682 = $8.5 Mil.
Accounts Receivable was $16.7 Mil.
Revenue was 23.126 + 24.298 + 19.35 + 19.24 = $86.0 Mil.
Gross Profit was 12.311 + 13.121 + 10.253 + 10.265 = $46.0 Mil.
Total Current Assets was $73.6 Mil.
Total Assets was $326.5 Mil.
Property, Plant and Equipment(Net PPE) was $179.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.3 Mil.
Selling, General & Admin. Expense(SGA) was $29.7 Mil.
Total Current Liabilities was $29.4 Mil.
Long-Term Debt was $46.4 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)
=(34.453 / 162.765) / (16.679 / 86.014)
=0.21167327 / 0.19391029
=1.0916

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)
=(21.775 / 86.014) / (21.894 / 162.765)
=0.53421536 / 0.46828249
=1.1408

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 - (118.189 + 195.238) / 515.501) / (1 - (73.571 + 179.241) / 326.537)
=0.39199536 / 0.2257784
=1.7362

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
=162.765 / 86.014
=1.8923

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))
=(8.257 / (8.257 + 179.241)) / (23.812 / (23.812 + 195.238))
=0.0440378 / 0.10870577
=0.4051

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)
=(40.283 / 162.765) / (29.729 / 86.014)
=0.24749178 / 0.34562978
=0.7161

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)
=((151.275 + 36.464) / 515.501) / ((46.446 + 29.358) / 326.537)
=0.36418746 / 0.23214521
=1.5688

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
=(-19.113 - -2.209 - 8.503) / 515.501
=-0.0493

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

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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.07730.99051.14481.03921.1331.06161.26861.09850.94861.0916
GMI 0.94590.9710.95931.02341.02341.02011.1091.09821.1211.1408
AQI 1.07011.12091.13752.13471.62111.62510.98581.63651.72061.7362
SGI 1.12991.14871.15061.17611.2221.20841.29691.55151.6931.8923
DEPI 1.22321.06061.07780.96471.02030.95530.76130.60120.44180.4051
SGAI 0.94390.95060.97640.95160.95351.01720.97330.90830.83180.7161
LVGI 2.54171.78392.28630.87190.91960.93051.53041.72231.67941.5688
TATA -0.0162-0.0191-0.0173-0.026-0.0231-0.0231-0.0108-0.0212-0.0498-0.0493
M-score -2.84-2.65-2.67-1.89-1.97-2.07-2.16-1.95-2.04-1.66
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)

GuruFocus Premium Plus Membership

FEEDBACK