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GE Aerospace (LIM:GE) Beneish M-Score

: -2.64 (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 -2.64 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LIM:GE' s Beneish M-Score Range Over the Past 10 Years
Min: -2.85   Med: -2.63   Max: -2.48
Current: -2.64

During the past 13 years, the highest Beneish M-Score of GE Aerospace was -2.48. The lowest was -2.85. And the median was -2.63.


GE Aerospace Beneish M-Score Historical Data

The historical data trend for GE Aerospace'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.

GE Aerospace Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.72 -2.55 -2.50 -2.76 -2.64

GE Aerospace Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Beneish M-Score 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 Premium Member Only Premium Member Only Premium Member Only -2.76 -2.76 -2.74 -2.75 -2.64

Competitive Comparison

For the Aerospace & Defense subindustry, GE Aerospace'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.


GE Aerospace Beneish M-Score Distribution

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

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



GE Aerospace 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 GE Aerospace 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 * 0.8394+0.528 * 0.9209+0.404 * 0.8887+0.892 * 1.1696+0.115 * 1.3476
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8781+4.679 * -0.016529-0.327 * 1.1699
=-2.64

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $17,432 Mil.
Revenue was 19423 + 17346 + 16698 + 14485 = $67,952 Mil.
Gross Profit was 5027 + 4442 + 4336 + 3756 = $17,561 Mil.
Total Current Assets was $59,798 Mil.
Total Assets was $163,045 Mil.
Property, Plant and Equipment(Net PPE) was $12,494 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,079 Mil.
Selling, General, & Admin. Expense(SGA) was $12,081 Mil.
Total Current Liabilities was $50,876 Mil.
Long-Term Debt & Capital Lease Obligation was $21,684 Mil.
Net Income was 1592 + 348 + 35 + 7506 = $9,481 Mil.
Non Operating Income was 906 + -696 + 713 + 6074 = $6,997 Mil.
Cash Flow from Operations was 3141 + 1823 + 474 + -259 = $5,179 Mil.
Total Receivables was $17,755 Mil.
Revenue was 16826 + 14471 + 14128 + 12674 = $58,099 Mil.
Gross Profit was 4387 + 2937 + 3603 + 2900 = $13,827 Mil.
Total Current Assets was $58,382 Mil.
Total Assets was $188,851 Mil.
Property, Plant and Equipment(Net PPE) was $12,193 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,902 Mil.
Selling, General, & Admin. Expense(SGA) was $11,763 Mil.
Total Current Liabilities was $49,428 Mil.
Long-Term Debt & Capital Lease Obligation was $22,409 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)
=(17432 / 67952) / (17755 / 58099)
=0.256534 / 0.305599
=0.8394

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)
=(13827 / 58099) / (17561 / 67952)
=0.23799 / 0.258432
=0.9209

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 - (59798 + 12494) / 163045) / (1 - (58382 + 12193) / 188851)
=0.556613 / 0.626293
=0.8887

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
=67952 / 58099
=1.1696

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))
=(2902 / (2902 + 12193)) / (2079 / (2079 + 12494))
=0.192249 / 0.142661
=1.3476

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)
=(12081 / 67952) / (11763 / 58099)
=0.177787 / 0.202465
=0.8781

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)
=((21684 + 50876) / 163045) / ((22409 + 49428) / 188851)
=0.445031 / 0.38039
=1.1699

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
=(9481 - 6997 - 5179) / 163045
=-0.016529

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.

GE Aerospace has a M-score of -2.64 suggests that the company is unlikely to be a manipulator.


GE Aerospace Beneish M-Score Related Terms

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GE Aerospace (LIM:GE) Business Description

Address
5 Necco Street, Boston, MA, USA, 02210
GE was formed through the combination of two companies in 1892, including one with historical ties to American inventor Thomas Edison. Today, GE is a global leader in air travel and in the energy transition. The company is known for its differentiated technology and its massive industrial installed base of equipment sprawled throughout the world. That installed base most notably includes aerospace engines, gas and steam turbines, and onshore and offshore wind turbines. GE earns most of its profits on the service revenue of that equipment, which is generally higher-margin. The company is led by Danaher alumnus Larry Culp, who is leading a multiyear turnaround of the conglomerate based on lean principles.