General Dynamics (FRA:GDX) Beneish M-Score

: -2.59 (As of Today)

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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 -2.59 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

FRA:GDX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.46 Med: -2.51 Max: -1.28
Current: -2.59

During the past 13 years, the highest Beneish M-Score of General Dynamics was -1.28. The lowest was -6.46. And the median was -2.51.

General Dynamics Beneish M-Score Historical Data

The historical data trend for General Dynamics'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.

* Premium members only.

General Dynamics Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Beneish M-Score

-2.21

-2.32

-2.52

-2.53

-2.59

General Dynamics Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22
Beneish M-Score																-2.53	-2.79	-2.72	-2.73	-2.59

Competitive Comparison

For the Aerospace & Defense subindustry, General Dynamics'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.

Annual Data Quarterly Data

General Dynamics Beneish M-Score Distribution

For the Aerospace & Defense industry and Industrials sector, General Dynamics's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where General Dynamics's Beneish M-Score falls in comparison to its industry or sector. The grey bar indicates the Beneish M-Score's extreme value range as defined by GuruFocus.

General Dynamics 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 General Dynamics 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 * 0.9528

0.528 * 0.9917

0.404 * 0.9688

0.892 * 1.1452

0.115 * 1.0402

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0469

4.679 * -0.0263

0.327 * 0.9746

-2.53

This Year (Dec22) TTM:

Last Year (Dec21) TTM:

Total Receivables was €11,142 Mil.
Revenue was 10243.343999984 + 10074.75000001 + 8692.7940002573 + 8527.9360000239 = €37,539 Mil.
Gross Profit was 1728.4639999972 + 1681.6500000017 + 1506.0320000446 + 1392.8720000039 = €6,309 Mil.
Total Current Assets was €19,883 Mil.
Total Assets was €48,696 Mil.
Property, Plant and Equipment(Net PPE) was €5,570 Mil.
Depreciation, Depletion and Amortization(DDA) was €842 Mil.
Selling, General, & Admin. Expense(SGA) was €2,292 Mil.
Total Current Liabilities was €14,482 Mil.
Long-Term Debt & Capital Lease Obligation was €9,981 Mil.
Net Income was 936.4479999985 + 911.02000000091 + 724.63600002145 + 662.84000000186 = €3,235 Mil.
Non Operating Income was 65.135999999896 + 41.410000000041 + 37.84000000112 + 35.412000000099 = €180 Mil.
Cash Flow from Operations was 631.53599999899 + 1295.8300000013 + 623.41400001845 + 1786.944000005 = €4,338 Mil.

Total Receivables was €10,212 Mil.
Revenue was 9108.4200002004 + 8132.800000244 + 7652.6000000536 + 7886.7599998423 = €32,781 Mil.
Gross Profit was 1562.9100000344 + 1385.5000000416 + 1257.4500000088 + 1257.4799999749 = €5,463 Mil.
Total Current Assets was €17,688 Mil.
Total Assets was €44,315 Mil.
Property, Plant and Equipment(Net PPE) was €4,794 Mil.
Depreciation, Depletion and Amortization(DDA) was €758 Mil.
Selling, General, & Admin. Expense(SGA) was €1,912 Mil.
Total Current Liabilities was €12,371 Mil.
Long-Term Debt & Capital Lease Obligation was €10,472 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)
	=	(11142.031999982 / 37538.824000275)	/	(10212.015000225 / 32780.58000034)
	=	0.29681356	/	0.31152637
	=	0.9528

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)
	=	(5463.3400000596 / 32780.58000034)	/	(6309.0180000474 / 37538.824000275)
	=	0.16666392	/	0.16806648
	=	0.9917

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 - (19883.471999968 + 5569.5999999911) / 48696.239999922)	/	(1 - (17688.495000389 + 4794.0450001055) / 44314.605000975)
	=	0.4773093	/	0.49266072
	=	0.9688

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
	=	37538.824000275	/	32780.58000034
	=	1.1452

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))
	=	(758.27000000774 / (758.27000000774 + 4794.0450001055))	/	(841.70600000634 / (841.70600000634 + 5569.5999999911))
	=	0.13656826	/	0.13128464
	=	1.0402

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)
	=	(2292.0980000184 / 37538.824000275)	/	(1911.8400000192 / 32780.58000034)
	=	0.0610594	/	0.05832234
	=	1.0469

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)
	=	((9980.911999984 + 14481.903999977) / 48696.239999922)	/	((10472.20500023 + 12370.530000272) / 44314.605000975)
	=	0.50235534	/	0.51546742
	=	0.9746

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
	=	(3234.9440000227 - 179.79800000116	-	4337.7240000237)	/	48696.239999922
	=	-0.0263

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.

General Dynamics has a M-score of -2.53 suggests that the company is unlikely to be a manipulator.

General Dynamics Beneish M-Score Related Terms

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General Dynamics (FRA:GDX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » General Dynamics Corp (FRA:GDX) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

GD:USA GD:Mexico GDX:Germany GDBR34:Brazil GEDY:Austria

Address

11011 Sunset Hills Road, Reston, VA, USA, 20190

Website

https://www.gd.com

General Dynamics is a defense contractor and business jet manufacturer. The firm's segments include aerospace, combat systems, marine, and technologies. General Dynamics' aerospace segment creates Gulfstream business jets. Combat system produces land-based combat vehicles, such as the M1 Abrams tank. The marine subsegment creates nuclear-powered submarines, among other things. The technologies segment contains two main units, an IT business that primarily serves the government market and a mission systems business that focuses on products that provide command, control, computers, intelligence, surveillance, and reconnaissance capabilities to the military.