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Graco (GGG) Beneish M-Score : -2.81 (As of May. 28, 2024)


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What is Graco 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 -2.81 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

GGG' s Beneish M-Score Range Over the Past 10 Years
Min: -2.81   Med: -2.48   Max: -2.1
Current: -2.81

During the past 13 years, the highest Beneish M-Score of Graco was -2.10. The lowest was -2.81. And the median was -2.48.


Graco Beneish M-Score Historical Data

The historical data trend for Graco'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.

Graco Beneish M-Score Chart

Graco Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.58 -2.37 -2.48 -2.14 -2.64

Graco Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.30 -2.52 -2.61 -2.64 -2.81

Competitive Comparison of Graco's Beneish M-Score

For the Specialty Industrial Machinery subindustry, Graco'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.


Graco's Beneish M-Score Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Graco's Beneish M-Score distribution charts can be found below:

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



Graco 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 Graco 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 * 0.912+0.528 * 0.9437+0.404 * 0.8834+0.892 * 0.9905+0.115 * 1.04
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0838+4.679 * -0.055104-0.327 * 0.6902
=-2.81

* 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.

This Year (Mar24) TTM:Last Year (Mar23) TTM:
Total Receivables was $322 Mil.
Revenue was 492.189 + 566.644 + 539.672 + 559.644 = $2,158 Mil.
Gross Profit was 266.197 + 299.942 + 284.524 + 291.415 = $1,142 Mil.
Total Current Assets was $1,444 Mil.
Total Assets was $2,787 Mil.
Property, Plant and Equipment(Net PPE) was $768 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General, & Admin. Expense(SGA) was $435 Mil.
Total Current Liabilities was $352 Mil.
Long-Term Debt & Capital Lease Obligation was $9 Mil.
Net Income was 122.199 + 109.954 + 133.123 + 134.268 = $500 Mil.
Non Operating Income was 8.078 + -41.727 + 3.283 + 4.365 = $-26 Mil.
Cash Flow from Operations was 118.923 + 159.647 + 209.047 + 191.494 = $679 Mil.
Total Receivables was $356 Mil.
Revenue was 529.646 + 555.045 + 545.644 + 548.547 = $2,179 Mil.
Gross Profit was 285.14 + 272.816 + 261.088 + 269.06 = $1,088 Mil.
Total Current Assets was $1,288 Mil.
Total Assets was $2,546 Mil.
Property, Plant and Equipment(Net PPE) was $663 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General, & Admin. Expense(SGA) was $406 Mil.
Total Current Liabilities was $382 Mil.
Long-Term Debt & Capital Lease Obligation was $96 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)
=(322 / 2158.149) / (356.473 / 2178.882)
=0.149202 / 0.163604
=0.912

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)
=(1088.104 / 2178.882) / (1142.078 / 2158.149)
=0.499386 / 0.529193
=0.9437

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 - (1444.228 + 767.747) / 2786.825) / (1 - (1288.461 + 663.224) / 2546.263)
=0.206274 / 0.23351
=0.8834

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
=2158.149 / 2178.882
=0.9905

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))
=(68.414 / (68.414 + 663.224)) / (75.85 / (75.85 + 767.747))
=0.093508 / 0.089913
=1.04

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)
=(435.492 / 2158.149) / (405.69 / 2178.882)
=0.20179 / 0.186192
=1.0838

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)
=((9.458 + 351.687) / 2786.825) / ((96.384 + 381.698) / 2546.263)
=0.12959 / 0.187758
=0.6902

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
=(499.544 - -26.001 - 679.111) / 2786.825
=-0.055104

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.

Graco has a M-score of -2.81 suggests that the company is unlikely to be a manipulator.


Graco (GGG) Business Description

Traded in Other Exchanges
Address
88-11th Avenue Northeast, Minneapolis, MN, USA, 55413
Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco's business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $2.1 billion in sales and $573 million in operating income in 2022.
Executives
Mark W Sheahan officer: VICE PRESIDENT AND TREASURER P.O. BOX 1441, MINNEAPOLIS MN 55440-1441
Angela F Wordell officer: Executive VP, Operations 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Kathryn L Schoenrock officer: Executive Vice President 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Caroline M Chambers officer: Vice President and Controller PO BOX 1441, MINNEAPOLIS MN 55440-1441
Eric Etchart director ROOM F, 22F CROSS REGION PLAZA, 899 LINGLING ROAD, SHANGHAI F4 200030
Van Sant R William director PO BOX 1441, MINNEAPOLIS MN 55440-1441
Timothy R White officer: President, EMEA 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Ronita Banerjee officer: EVP, Chief HR Officer 88 11TH AVENUE NE, MINNEAPOLIS MN 55105
Jeffrey P. Johnson officer: Vice President 88 - 11TH AVENUE N.E., MINNEAPOLIS MN 55413
Heather L Anfang director 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Dale D Johnson officer: VICE PRESIDENT P.O. BOX 1441, MINNEAPOLIS MN 5440-1441
Christopher D. Knutson officer: EVP, Corporate Controller 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Claudio Merengo officer: President, Worldwide Gema 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
J Kevin Gilligan director P O BOX 1441, MINNEAPOLIS MN 55440-1441
Archie C. Black director 333 SOUTH SEVENTH STREET, SUITE 1000, MINNEAPOLIS MN 55402

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