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Orbit International Corp. (NAS:ORBT)
Beneish M-Score
-2.72 (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.

Orbit International Corp. has a M-score of -4.68 suggests that the company is not a manipulator.

ORBT' s 10-Year Beneish M-Score Range
Min: -4.36   Max: 2.3
Current: -2.72

-4.36
2.3

During the past 13 years, the highest Beneish M-Score of Orbit International Corp. was 2.30. The lowest was -4.36. And the median was -2.41.


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 Orbit International Corp. 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 * 0.6577+0.528 * 1.0531+0.404 * 0.4084+0.892 * 0.8437+0.115 * 0.6449
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0349+4.679 * -0.3331-0.327 * 0.7896
=-4.68

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2.98 Mil.
Revenue was 5.807 + 6.109 + 6.475 + 6.447 = $24.84 Mil.
Gross Profit was 1.989 + 2.366 + 2.497 + 2.491 = $9.34 Mil.
Total Current Assets was $17.85 Mil.
Total Assets was $19.73 Mil.
Property, Plant and Equipment(Net PPE) was $0.98 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.46 Mil.
Selling, General & Admin. Expense(SGA) was $9.54 Mil.
Total Current Liabilities was $3.84 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -2.726 + 0.127 + 0.109 + -0.08 = $-2.57 Mil.
Non Operating Income was 0.011 + 0.006 + 0 + 0 = $0.02 Mil.
Cash Flow from Operations was 1.348 + 1.178 + 0.068 + 1.391 = $3.99 Mil.
Accounts Receivable was $5.37 Mil.
Revenue was 7.903 + 7.864 + 7.509 + 6.162 = $29.44 Mil.
Gross Profit was 3.381 + 3.059 + 2.834 + 2.387 = $11.66 Mil.
Total Current Assets was $21.08 Mil.
Total Assets was $24.98 Mil.
Property, Plant and Equipment(Net PPE) was $1.10 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.29 Mil.
Selling, General & Admin. Expense(SGA) was $10.93 Mil.
Total Current Liabilities was $6.14 Mil.
Long-Term Debt was $0.01 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)
=(2.981 / 24.838) / (5.372 / 29.438)
=0.12001771 / 0.18248522
=0.6577

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)
=(2.366 / 29.438) / (1.989 / 24.838)
=0.39612066 / 0.3761575
=1.0531

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 - (17.853 + 0.975) / 19.731) / (1 - (21.078 + 1.099) / 24.976)
=0.04576555 / 0.11206758
=0.4084

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
=24.838 / 29.438
=0.8437

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))
=(0.288 / (0.288 + 1.099)) / (0.463 / (0.463 + 0.975))
=0.20764239 / 0.32197497
=0.6449

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)
=(9.54 / 24.838) / (10.926 / 29.438)
=0.3840889 / 0.37115293
=1.0349

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)
=((0 + 3.837) / 19.731) / ((0.008 + 6.143) / 24.976)
=0.19446556 / 0.24627643
=0.7896

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
=(-2.57 - 0.017 - 3.985) / 19.731
=-0.3331

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.

Orbit International Corp. has a M-score of -4.68 suggests that the company will not 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.

Orbit International Corp. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.89951.11010.9741.22281.27540.62851.00941.08421.14640.6577
GMI 1.01190.96371.03190.99821.02671.04411.1420.83121.07591.0531
AQI 0.96272.47220.8471.26990.64040.73670.84220.92780.80880.4084
SGI 1.05091.34651.03141.03481.05710.96911.00871.16050.94840.8437
DEPI 1.21050.44870.99011.30810.81431.49811.53271.15511.01270.6449
SGAI 0.94840.98371.00751.01821.1251.01871.12350.73861.15731.0349
LVGI 0.7592.58540.87641.17311.04630.931910.75031.05480.7896
TATA 0.0828-0.0146-0.07560.0166-0.1548-0.1327-0.14180.04710.027-0.3333
M-score -2.04-2.14-2.84-2.08-3.09-3.48-3.08-2.01-2.35-4.68

Orbit International Corp. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.90841.08420.74550.73060.9671.14641.12571.08571.20640.6577
GMI 0.95560.83120.90240.93640.99261.07591.05481.03471.0061.0531
AQI 0.75810.92780.9230.90240.9280.80880.85271.0270.90420.4084
SGI 1.09531.16051.08431.00940.99120.94840.9780.96870.9090.8437
DEPI 1.33011.15511.01811.05091.03871.01270.97950.94490.94820.6449
SGAI 1.08050.73860.91151.00340.95831.15730.86860.84310.92761.0349
LVGI 0.92480.75030.76660.86340.99711.05480.8760.77540.72730.7896
TATA -0.05920.0527-0.0606-0.07950.03510.03090.0058-0.0431-0.0932-0.3331
M-score -2.83-1.99-2.91-3.11-2.37-2.33-2.33-2.51-2.75-4.68
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