GE Aerospace (XPAR:GNE) 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:

XPAR:GNE' 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

-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																-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:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.8382

0.528 * 0.9189

0.404 * 0.8887

0.892 * 1.1378

0.115 * 1.3284

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8828

4.679 * -0.016487

0.327 * 1.1699

-2.67

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €15,985 Mil.
Revenue was 17810.891 + 16253.202 + 15412.254 + 13528.99 = €63,005 Mil.
Gross Profit was 4609.759 + 4162.154 + 4002.128 + 3508.104 = €16,282 Mil.
Total Current Assets was €54,835 Mil.
Total Assets was €149,512 Mil.
Property, Plant and Equipment(Net PPE) was €11,457 Mil.
Depreciation, Depletion and Amortization(DDA) was €1,929 Mil.
Selling, General, & Admin. Expense(SGA) was €11,202 Mil.
Total Current Liabilities was €46,653 Mil.
Long-Term Debt & Capital Lease Obligation was €19,884 Mil.
Net Income was 1459.864 + 326.076 + 32.305 + 7010.604 = €8,829 Mil.
Non Operating Income was 830.802 + -652.152 + 658.099 + 5673.116 = €6,510 Mil.
Cash Flow from Operations was 2880.297 + 1708.151 + 437.502 + -241.906 = €4,784 Mil.

Total Receivables was €16,761 Mil.
Revenue was 15883.744 + 14615.71 + 13365.088 + 11507.992 = €55,373 Mil.
Gross Profit was 4141.328 + 2966.37 + 3408.438 + 2633.2 = €13,149 Mil.
Total Current Assets was €55,113 Mil.
Total Assets was €178,275 Mil.
Property, Plant and Equipment(Net PPE) was €11,510 Mil.
Depreciation, Depletion and Amortization(DDA) was €2,725 Mil.
Selling, General, & Admin. Expense(SGA) was €11,152 Mil.
Total Current Liabilities was €46,660 Mil.
Long-Term Debt & Capital Lease Obligation was €21,154 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)
	=	(15985.144 / 63005.337)	/	(16760.72 / 55372.534)
	=	0.253711	/	0.30269
	=	0.8382

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)
	=	(13149.336 / 55372.534)	/	(16282.145 / 63005.337)
	=	0.23747	/	0.258425
	=	0.9189

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 - (54834.766 + 11456.998) / 149512.265)	/	(1 - (55112.608 + 11510.192) / 178275.344)
	=	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
	=	63005.337	/	55372.534
	=	1.1378

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))
	=	(2724.632 / (2724.632 + 11510.192))	/	(1928.668 / (1928.668 + 11456.998))
	=	0.191406	/	0.144085
	=	1.3284

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)
	=	(11202.497 / 63005.337)	/	(11151.844 / 55372.534)
	=	0.177802	/	0.201397
	=	0.8828

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)
	=	((19884.228 + 46653.292) / 149512.265)	/	((21154.096 + 46660.032) / 178275.344)
	=	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
	=	(8828.849 - 6509.865	-	4784.044)	/	149512.265
	=	-0.016487

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 -2.67 suggests that the company is unlikely to be a manipulator.

GE Aerospace Beneish M-Score Related Terms

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GE Aerospace (XPAR:GNE) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

GE:USA GE:Peru GE:Mexico 1GE:Italy GEC:UK GCP:Germany GE:Chile GE:Switzerland GEOO34:Brazil GE:Argentina

Address

5 Necco Street, Boston, MA, USA, 02210

Website

https://www.ge.com

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.