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ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-2.07 (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 -2.07 signals that the company is a manipulator.

ORBC' s 10-Year Beneish M-Score Range
Min: -8799.96   Max: 6.28
Current: -2.07

-8799.96
6.28

During the past 13 years, the highest Beneish M-Score of ORBCOMM Inc was 6.28. The lowest was -8799.96. And the median was -2.63.


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 * 0.9486+0.528 * 1.0603+0.404 * 1.7206+0.892 * 1.693+0.115 * 0.4418
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8033+4.679 * -0.0498-0.327 * 1.6794
=-2.07

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $30.1 Mil.
Revenue was 44.883 + 42.33 + 29.468 + 23.126 = $139.8 Mil.
Gross Profit was 21.775 + 20.678 + 11.873 + 12.311 = $66.6 Mil.
Total Current Assets was $120.6 Mil.
Total Assets was $515.6 Mil.
Property, Plant and Equipment(Net PPE) was $189.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.0 Mil.
Selling, General & Admin. Expense(SGA) was $38.3 Mil.
Total Current Liabilities was $39.7 Mil.
Long-Term Debt was $150.0 Mil.
Net Income was -12.208 + -2.873 + -5.623 + -0.033 = $-20.7 Mil.
Non Operating Income was 0.204 + 0.188 + -2.516 + 0.062 = $-2.1 Mil.
Cash Flow from Operations was 2.516 + 4.819 + -2.682 + 2.368 = $7.0 Mil.
Accounts Receivable was $18.7 Mil.
Revenue was 24.298 + 19.35 + 19.24 + 19.693 = $82.6 Mil.
Gross Profit was 13.121 + 10.253 + 9.002 + 9.358 = $41.7 Mil.
Total Current Assets was $78.6 Mil.
Total Assets was $320.4 Mil.
Property, Plant and Equipment(Net PPE) was $167.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.4 Mil.
Selling, General & Admin. Expense(SGA) was $28.2 Mil.
Total Current Liabilities was $23.6 Mil.
Long-Term Debt was $46.6 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)
=(30.061 / 139.807) / (18.719 / 82.581)
=0.21501785 / 0.22667442
=0.9486

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)
=(20.678 / 82.581) / (21.775 / 139.807)
=0.50537048 / 0.47663565
=1.0603

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 - (120.557 + 189.683) / 515.571) / (1 - (78.586 + 167.632) / 320.372)
=0.39825941 / 0.23146218
=1.7206

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
=139.807 / 82.581
=1.693

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))
=(7.362 / (7.362 + 167.632)) / (19.962 / (19.962 + 189.683))
=0.04207001 / 0.09521811
=0.4418

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)
=(38.335 / 139.807) / (28.187 / 82.581)
=0.27419943 / 0.34132549
=0.8033

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 + 39.701) / 515.571) / ((46.56 + 23.632) / 320.372)
=0.3679435 / 0.2190953
=1.6794

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
=(-20.737 - -2.062 - 7.021) / 515.571
=-0.0498

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 -2.07 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 0.52080.92490.88760.66571.03770.95391.38750.9671.14481.2686
GMI 0.03061.20970.42290.637837.30440.02461.18940.98041.07530.9894
AQI 1.23440.90670.76821.55020.86780.82772.50291.1561.13750.9858
SGI 1.4291.57921.14810.97011.00941.33051.26261.39291.15061.2969
DEPI 1.43992.7271.62561.40070.15983.6450.96391.26671.07780.7613
SGAI 0.75631.06610.97931.10030.90110.73220.94870.78311.0390.9147
LVGI 0.41510.61461.38811.02040.710.89081.77640.7942.45841.5304
TATA -0.1313-0.0177-0.0406-0.0399-0.0371-0.0501-0.0311-0.0308-0.0173-0.0108
M-score -3.29-1.73-3.09-2.9516.52-2.66-1.58-2.12-2.67-2.22

ORBCOMM Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.13841.07730.99051.14481.03921.1331.06161.26861.09850.9486
GMI 0.96280.99991.05611.07531.08621.02360.96450.98941.00671.0603
AQI 0.84181.07011.12091.13752.13471.62111.62510.98581.63651.7206
SGI 1.20331.12991.14871.15061.17611.2221.20841.29691.55151.693
DEPI 1.2611.27371.10741.07780.96471.00110.93690.76130.60120.4418
SGAI 0.90880.96660.991.0370.98590.96230.99190.91470.86420.8033
LVGI 2.54632.54171.78392.45840.87190.91960.93051.53041.72231.6794
TATA -0.0181-0.0162-0.0191-0.0173-0.026-0.0231-0.0231-0.0108-0.0212-0.0498
M-score -2.80-2.81-2.61-2.67-1.86-1.97-2.09-2.22-1.99-2.07
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