Switch to:
Check Point Software Technologies Ltd (NAS:CHKP)
Beneish M-Score
-2.75 (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.

Check Point Software Technologies Ltd has a M-score of -2.75 suggests that the company is not a manipulator.

CHKP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: 49.67
Current: -2.75

-3.25
49.67

During the past 13 years, the highest Beneish M-Score of Check Point Software Technologies Ltd was 49.67. The lowest was -3.25. And the median was -2.52.


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 Check Point Software Technologies Ltd 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 * 0.9297+0.528 * 1.0002+0.404 * 0.986+0.892 * 1.089+0.115 * 0.9611
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0638+4.679 * -0.0488-0.327 * 1.116
=-2.75

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $219 Mil.
Revenue was 403.856 + 395.334 + 372.576 + 420.642 = $1,592 Mil.
Gross Profit was 356.452 + 349.731 + 331.246 + 368.719 = $1,406 Mil.
Total Current Assets was $1,593 Mil.
Total Assets was $4,858 Mil.
Property, Plant and Equipment(Net PPE) was $44 Mil.
Depreciation, Depletion and Amortization(DDA) was $13 Mil.
Selling, General & Admin. Expense(SGA) was $433 Mil.
Total Current Liabilities was $909 Mil.
Long-Term Debt was $0 Mil.
Net Income was 167.743 + 162.636 + 160.883 + 185.783 = $677 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 227.827 + 192.726 + 284.587 + 208.883 = $914 Mil.
Accounts Receivable was $216 Mil.
Revenue was 370.37 + 362.598 + 342.206 + 387.075 = $1,462 Mil.
Gross Profit was 325.641 + 321.587 + 303.328 + 340.88 = $1,291 Mil.
Total Current Assets was $1,522 Mil.
Total Assets was $4,766 Mil.
Property, Plant and Equipment(Net PPE) was $39 Mil.
Depreciation, Depletion and Amortization(DDA) was $11 Mil.
Selling, General & Admin. Expense(SGA) was $373 Mil.
Total Current Liabilities was $799 Mil.
Long-Term Debt was $0 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)
=(219.054 / 1592.408) / (216.351 / 1462.249)
=0.13756148 / 0.1479577
=0.9297

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)
=(349.731 / 1462.249) / (356.452 / 1592.408)
=0.88318474 / 0.88303249
=1.0002

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 - (1593.408 + 44.366) / 4858.168) / (1 - (1522.378 + 39.424) / 4766.125)
=0.66288239 / 0.67231199
=0.986

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
=1592.408 / 1462.249
=1.089

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))
=(11.124 / (11.124 + 39.424)) / (13.176 / (13.176 + 44.366))
=0.22006805 / 0.22898057
=0.9611

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)
=(432.64 / 1592.408) / (373.448 / 1462.249)
=0.27168917 / 0.25539289
=1.0638

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)
=((0 + 908.701) / 4858.168) / ((0 + 798.838) / 4766.125)
=0.18704602 / 0.16760744
=1.116

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
=(677.045 - 0 - 914.023) / 4858.168
=-0.0488

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.

Check Point Software Technologies Ltd has a M-score of -2.75 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 own currency.

Check Point Software Technologies Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.12421.11771.12950.98540.84061.11120.97120.97830.90021.028
GMI 1.01131.05551.00221.03461.00610.99010.97460.99791.00150.9977
AQI 1.32461.40710.99551.13691.00170.94241.01111.16910.96041.0011
SGI 0.99271.27081.10621.14341.18761.13581.07681.03831.0731.0896
DEPI 2.97490.54370.86350.87880.98591.04912.0361.23021.09270.958
SGAI 1.21311.06310.89310.90570.88830.960.94651.03341.02851.0772
LVGI 0.93931.1390.98611.16131.02071.0041.02761.05960.93721.1059
TATA -0.0424-0.0401-0.0339-0.0616-0.0652-0.0416-0.0432-0.025-0.0181-0.0456
M-score -2.22-2.23-2.42-2.63-2.75-2.47-2.53-2.51-2.58-2.64

Check Point Software Technologies Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03080.97830.79620.88390.7930.90020.89490.91290.92971.028
GMI 0.99160.99790.99980.9990.99991.00151.0011.00231.00020.9977
AQI 1.12121.16911.08341.0111.01090.96040.98761.0070.9861.0011
SGI 1.03361.03831.04531.05291.0631.0731.07971.08561.0891.0896
DEPI 1.79171.23021.04461.04891.05341.09271.06671.01820.96110.958
SGAI 1.00381.03341.0311.03581.03491.02851.03711.0441.06381.0772
LVGI 1.13661.05960.87430.86120.85780.93721.06331.09021.1161.1059
TATA -0.0625-0.02790.00590.01540.0143-0.0186-0.04-0.0447-0.0488-0.0456
M-score -2.62-2.53-2.52-2.42-2.50-2.58-2.72-2.72-2.75-2.64
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK