ResMed (ASX:RMD) Beneish M-Score : -2.43 (As of Dec. 14, 2024)

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What is ResMed Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.43 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for ResMed's Beneish M-Score or its related term are showing as below:

ASX:RMD' s Beneish M-Score Range Over the Past 10 Years
Min: -2.84 Med: -2.41 Max: -1.99
Current: -2.43

During the past 13 years, the highest Beneish M-Score of ResMed was -1.99. The lowest was -2.84. And the median was -2.41.

ResMed Beneish M-Score Historical Data

The historical data trend for ResMed's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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ResMed Beneish M-Score Chart

ResMed Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

Beneish M-Score

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-2.70

-2.42

-2.09

-2.12

-2.44

ResMed Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.34	-2.39	-2.41	-2.44	-2.43

Competitive Comparison of ResMed's Beneish M-Score

For the Medical Instruments & Supplies subindustry, ResMed's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

ResMed's Beneish M-Score Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, ResMed's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where ResMed's Beneish M-Score falls into.

ResMed Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 ResMed for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0163

0.528 * 0.957

0.404 * 0.9544

0.892 * 1.0942

0.115 * 0.9959

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.94

4.679 * -0.03599

0.327 * 0.7167

-2.49

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was A$1,198 Mil.
Revenue was 1808.6 + 1842.132 + 1825.395 + 1737.225 = A$7,213 Mil.
Gross Profit was 1059.332 + 1077.584 + 1056.491 + 966.519 = A$4,160 Mil.
Total Current Assets was A$3,901 Mil.
Total Assets was A$10,668 Mil.
Property, Plant and Equipment(Net PPE) was A$1,059 Mil.
Depreciation, Depletion and Amortization(DDA) was A$325 Mil.
Selling, General, & Admin. Expense(SGA) was A$1,400 Mil.
Total Current Liabilities was A$1,335 Mil.
Long-Term Debt & Capital Lease Obligation was A$1,199 Mil.
Net Income was 459.871 + 440.107 + 458.25 + 311.947 = A$1,670 Mil.
Non Operating Income was -3.181 + -26.45 + 18.091 + -98.698 = A$-110 Mil.
Cash Flow from Operations was 480.82 + 662.812 + 613.097 + 407.611 = A$2,164 Mil.

Total Receivables was A$1,077 Mil.
Revenue was 1715.211 + 1671.865 + 1673.113 + 1532.009 = A$6,592 Mil.
Gross Profit was 933.693 + 919.907 + 925.392 + 859.138 = A$3,638 Mil.
Total Current Assets was A$3,586 Mil.
Total Assets was A$10,489 Mil.
Property, Plant and Equipment(Net PPE) was A$1,023 Mil.
Depreciation, Depletion and Amortization(DDA) was A$312 Mil.
Selling, General, & Admin. Expense(SGA) was A$1,361 Mil.
Total Current Liabilities was A$1,199 Mil.
Long-Term Debt & Capital Lease Obligation was A$2,278 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(1198.139 / 7213.352)	/	(1077.356 / 6592.198)
	=	0.1661	/	0.163429
	=	1.0163

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)
	=	(3638.13 / 6592.198)	/	(4159.926 / 7213.352)
	=	0.551884	/	0.576698
	=	0.957

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (3900.942 + 1059.421) / 10667.51)	/	(1 - (3585.934 + 1022.916) / 10488.663)
	=	0.535003	/	0.560587
	=	0.9544

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	7213.352	/	6592.198
	=	1.0942

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(311.971 / (311.971 + 1022.916))	/	(324.855 / (324.855 + 1059.421))
	=	0.233706	/	0.234675
	=	0.9959

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(1400.233 / 7213.352)	/	(1361.341 / 6592.198)
	=	0.194117	/	0.206508
	=	0.94

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((1199.424 + 1335.325) / 10667.51)	/	((2277.92 + 1199.368) / 10488.663)
	=	0.237614	/	0.331528
	=	0.7167

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
	=	(1670.175 - -110.238	-	2164.34)	/	10667.51
	=	-0.03599

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

ResMed has a M-score of -2.49 suggests that the company is unlikely to be a manipulator.

ResMed Beneish M-Score Related Terms

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ResMed Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » ResMed Inc (ASX:RMD) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

RSMDF:USA RMD:USA RMD:Mexico 0KW4:UK RME:Germany RME:Germany R1MD34:Brazil RMD:Austria

Address

9001 Spectrum Center Boulevard, San Diego, CA, USA, 92123

Website

https://www.resmed.com

ResMed is one of the largest respiratory care device companies globally, primarily developing and supplying flow generators, masks and accessories for the treatment of sleep apnea. Increasing diagnosis of sleep apnea combined with ageing populations and increasing prevalence of obesity is resulting in a structurally growing market. The company earns roughly two thirds of its revenue in the Americas and the balance across other regions dominated by Europe, Japan and Australia. Recent developments and acquisitions have focused on digital health as ResMed is aiming to differentiate itself through the provision of clinical data for use by the patient, medical care advisor and payer in the out-of-hospital setting.