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GuruFocus has detected 8 Warning Signs with Dover Corp $DOV.
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Dover Corp (NYSE:DOV)
Beneish M-Score
-2.60 (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.

Dover Corp has a M-score of -2.59 suggests that the company is not a manipulator.

DOV' s Beneish M-Score Range Over the Past 10 Years
Min: -4.12   Max: -1.2
Current: -2.6

-4.12
-1.2

During the past 13 years, the highest Beneish M-Score of Dover Corp was -1.20. The lowest was -4.12. And the median was -2.60.


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 Dover 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 * 1.0937+0.528 * 1.0124+0.404 * 0.9917+0.892 * 1.0178+0.115 * 1.0037
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0674+4.679 * -0.0396-0.327 * 1.0724
=-2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $1,299 Mil.
Revenue was 1813.372 + 1777.961 + 1707.763 + 1686.345 = $6,985 Mil.
Gross Profit was 661.174 + 619.704 + 631.788 + 631.213 = $2,544 Mil.
Total Current Assets was $2,762 Mil.
Total Assets was $10,238 Mil.
Property, Plant and Equipment(Net PPE) was $946 Mil.
Depreciation, Depletion and Amortization(DDA) was $368 Mil.
Selling, General & Admin. Expense(SGA) was $1,799 Mil.
Total Current Liabilities was $2,319 Mil.
Long-Term Debt was $2,888 Mil.
Net Income was 172.247 + 161.162 + 130.084 + 118.29 = $582 Mil.
Non Operating Income was 89.917 + 84.728 + 3.424 + 2.854 = $181 Mil.
Cash Flow from Operations was 78.071 + 289.029 + 231.665 + 207.868 = $807 Mil.
Accounts Receivable was $1,167 Mil.
Revenue was 1622.273 + 1694.6 + 1787.582 + 1758.628 = $6,863 Mil.
Gross Profit was 589.264 + 613.809 + 672.608 + 654.568 = $2,530 Mil.
Total Current Assets was $2,346 Mil.
Total Assets was $8,981 Mil.
Property, Plant and Equipment(Net PPE) was $859 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $1,656 Mil.
Total Current Liabilities was $1,649 Mil.
Long-Term Debt was $2,611 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)
=(1299.427 / 6985.441) / (1167.313 / 6863.083)
=0.18601932 / 0.17008581
=1.0937

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)
=(2530.249 / 6863.083) / (2543.879 / 6985.441)
=0.36867527 / 0.3641687
=1.0124

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 - (2761.919 + 946.376) / 10238.308) / (1 - (2345.756 + 858.984) / 8980.895)
=0.63780197 / 0.64316029
=0.9917

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
=6985.441 / 6863.083
=1.0178

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))
=(335.511 / (335.511 + 858.984)) / (367.733 / (367.733 + 946.376))
=0.28088104 / 0.27983447
=1.0037

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)
=(1799.365 / 6985.441) / (1656.196 / 6863.083)
=0.25758789 / 0.24131954
=1.0674

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)
=((2887.962 + 2319.203) / 10238.308) / ((2610.642 + 1648.809) / 8980.895)
=0.50859624 / 0.47427912
=1.0724

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
=(581.783 - 180.923 - 806.633) / 10238.308
=-0.0396

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.

Dover Corp has a M-score of -2.59 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 local exchange's currency.

Dover Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.95140.87311.13661.14240.87351.21840.81341.01731.05231.1561
GMI 0.99211.00970.99240.9261.01670.99151.00261.01221.03921.0147
AQI 0.95750.97021.03220.90491.06881.07631.13150.87661.04411.0499
SGI 1.11561.05110.76311.08351.17760.89921.07971.08350.89730.9767
DEPI 0.89830.9350.97021.11530.92461.39930.6310.97160.96961.0027
SGAI 1.03660.98241.16440.93560.9540.98280.98461.00391.04391.0923
LVGI 1.01531.01020.90020.98341.00421.14210.90811.3090.97081.1027
TATA -0.026-0.054-0.0563-0.0279-0.0196-0.0430.0017-0.02-0.01-0.0452
M-score -2.59-2.82-2.82-2.45-2.50-2.54-2.53-2.63-2.53-2.59

Dover Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.01730.85870.85370.89851.05231.15061.12821.08361.15611.0937
GMI 1.01221.03291.04671.05081.03921.02391.00921.00671.01471.0124
AQI 0.87661.00371.00431.01791.04411.07911.10531.07771.04990.9917
SGI 1.08351.06561.03290.99260.89730.89530.91010.9270.97671.0178
DEPI 0.97160.93580.94140.93940.96960.97860.95410.93381.00271.0037
SGAI 1.00391.01091.01951.03081.04391.05111.07781.09331.09231.0674
LVGI 1.3091.04551.04171.03780.97081.02531.04331.0551.10271.0724
TATA -0.02-0.0312-0.0109-0.0056-0.01-0.0231-0.0471-0.0551-0.0452-0.0396
M-score -2.63-2.70-2.63-2.60-2.53-2.52-2.65-2.73-2.59-2.59
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