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ORBCOMM Inc (NAS:ORBC)
Beneish M-Score
-1.95 (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 -1.95 signals that the company is a manipulator.

ORBC' s 10-Year Beneish M-Score Range
Min: -3.66   Max: 17.3
Current: -1.95

-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 -2.58.


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 * 1.0985+0.528 * 1.0982+0.404 * 1.6365+0.892 * 1.5515+0.115 * 0.6012
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9083+4.679 * -0.0212-0.327 * 1.7223
=-1.95

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $26.88 Mil.
Revenue was 42.33 + 29.468 + 23.126 + 24.298 = $119.22 Mil.
Gross Profit was 20.678 + 11.873 + 12.311 + 13.121 = $57.98 Mil.
Total Current Assets was $132.31 Mil.
Total Assets was $529.66 Mil.
Property, Plant and Equipment(Net PPE) was $188.46 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.51 Mil.
Selling, General & Admin. Expense(SGA) was $35.62 Mil.
Total Current Liabilities was $39.62 Mil.
Long-Term Debt was $150.00 Mil.
Net Income was -2.873 + -5.623 + -0.033 + 1.403 = $-7.13 Mil.
Non Operating Income was 0.188 + -2.516 + 0.062 + 0.061 = $-2.21 Mil.
Cash Flow from Operations was 4.819 + -2.682 + 4.506 + -0.33 = $6.31 Mil.
Accounts Receivable was $15.77 Mil.
Revenue was 19.35 + 19.24 + 19.693 + 18.559 = $76.84 Mil.
Gross Profit was 10.253 + 10.265 + 10.486 + 10.039 = $41.04 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 $25.28 Mil.
Total Current Liabilities was $18.25 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)
=(26.876 / 119.222) / (15.769 / 76.842)
=0.22542819 / 0.20521329
=1.0985

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)
=(11.873 / 76.842) / (20.678 / 119.222)
=0.53412196 / 0.4863448
=1.0982

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 - (132.312 + 188.461) / 529.656) / (1 - (100.127 + 136.544) / 311.813)
=0.39437484 / 0.24098418
=1.6365

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
=119.222 / 76.842
=1.5515

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))
=(6.542 / (6.542 + 136.544)) / (15.512 / (15.512 + 188.461))
=0.04572076 / 0.07604928
=0.6012

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)
=(35.624 / 119.222) / (25.28 / 76.842)
=0.29880391 / 0.32898675
=0.9083

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 + 39.624) / 529.656) / ((46.571 + 18.245) / 311.813)
=0.3580135 / 0.20786818
=1.7223

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
=(-7.126 - -2.205 - 6.313) / 529.656
=-0.0212

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 -1.95 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 0.03061.20970.42290.637837.30440.02461.18940.98040.95931.109
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 0.75631.06610.97931.10031.42090.46430.94870.78310.97640.9733
LVGI 0.41510.61461.38811.02040.710.89081.66680.912.28631.5304
TATA -0.1313-0.0177-0.0406-0.0399-0.0371-0.0501-0.0311-0.0308-0.0173-0.0108
M-score -3.29-1.73-3.09-2.9516.43-2.61-1.54-2.15-2.67-2.16

ORBCOMM Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.9671.13841.07730.99051.14481.03921.1331.06161.26861.0985
GMI 0.98040.93670.94590.9710.95931.02341.02341.02011.1091.0982
AQI 1.1560.84181.07011.12091.13752.13471.62111.62510.98581.6365
SGI 1.39291.20331.12991.14871.15061.17611.2221.20841.29691.5515
DEPI 1.26671.2611.22321.06061.07780.96471.02030.95530.76130.6012
SGAI 0.78280.89550.94390.95060.97640.95160.95351.01720.97330.9083
LVGI 0.912.54632.54171.78392.28630.87190.91960.93051.53041.7223
TATA -0.0308-0.0181-0.0162-0.0191-0.0173-0.026-0.0165-0.0231-0.0108-0.0212
M-score -2.15-2.81-2.84-2.65-2.67-1.89-1.94-2.07-2.16-1.95
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