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Check Point Software Technologies Ltd (NAS:CHKP)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

CHKP' s 10-Year Beneish M-Score Range
Min: -3.25   Max: 49.67
Current: -2.72

-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 -2.51.


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 * 0.9129+0.528 * 1.0023+0.404 * 1.007+0.892 * 1.0856+0.115 * 1.0182
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.044+4.679 * -0.0447-0.327 * 1.0902
=-2.72

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $243 Mil.
Revenue was 395.334 + 372.576 + 420.642 + 370.37 = $1,559 Mil.
Gross Profit was 349.731 + 331.246 + 368.719 + 325.641 = $1,375 Mil.
Total Current Assets was $1,549 Mil.
Total Assets was $4,885 Mil.
Property, Plant and Equipment(Net PPE) was $43 Mil.
Depreciation, Depletion and Amortization(DDA) was $12 Mil.
Selling, General & Admin. Expense(SGA) was $414 Mil.
Total Current Liabilities was $911 Mil.
Long-Term Debt was $0 Mil.
Net Income was 162.636 + 160.883 + 185.783 + 161.047 = $670 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 192.726 + 284.587 + 208.883 + 202.461 = $889 Mil.
Accounts Receivable was $245 Mil.
Revenue was 362.598 + 342.206 + 387.075 + 344.127 = $1,436 Mil.
Gross Profit was 321.587 + 303.328 + 340.88 + 303.998 = $1,270 Mil.
Total Current Assets was $1,539 Mil.
Total Assets was $4,772 Mil.
Property, Plant and Equipment(Net PPE) was $38 Mil.
Depreciation, Depletion and Amortization(DDA) was $11 Mil.
Selling, General & Admin. Expense(SGA) was $365 Mil.
Total Current Liabilities was $816 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)
=(243.223 / 1558.922) / (245.432 / 1436.006)
=0.15601999 / 0.17091293
=0.9129

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)
=(331.246 / 1436.006) / (349.731 / 1558.922)
=0.88425327 / 0.88223593
=1.0023

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 - (1548.668 + 42.663) / 4884.993) / (1 - (1538.86 + 38.083) / 4772.021)
=0.67424088 / 0.66954399
=1.007

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
=1558.922 / 1436.006
=1.0856

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))
=(11.229 / (11.229 + 38.083)) / (12.29 / (12.29 + 42.663))
=0.22771334 / 0.22364566
=1.0182

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)
=(413.972 / 1558.922) / (365.266 / 1436.006)
=0.26555017 / 0.25436245
=1.044

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 + 911.13) / 4884.993) / ((0 + 816.416) / 4772.021)
=0.18651613 / 0.17108391
=1.0902

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
=(670.349 - 0 - 888.657) / 4884.993
=-0.0447

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 -2.72 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.17791.12421.11771.12950.98540.84061.11120.97120.97830.9002
GMI 0.99871.01131.05551.00221.03461.00610.99010.97460.99791.0015
AQI 0.64781.32461.40710.99551.13691.00170.94241.01111.16910.9604
SGI 1.12420.99271.27081.10621.14341.18761.13581.07681.03831.073
DEPI 1.03772.97490.54370.86350.87880.98591.04912.0361.23021.0927
SGAI 0.921.21311.06310.89310.90570.88830.960.94651.03341.0285
LVGI 1.00840.93931.1390.98611.16131.02071.0041.02761.05960.9372
TATA -0.0442-0.0424-0.0401-0.0339-0.0616-0.0587-0.0487-0.0505-0.025-0.0181
M-score -2.54-2.22-2.23-2.42-2.63-2.72-2.50-2.56-2.51-2.58

Check Point Software Technologies Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.07311.01391.03080.97830.79620.88390.7930.90020.89490.9129
GMI 0.97760.98480.99160.99790.99980.9990.99991.00151.0011.0023
AQI 1.05661.09321.12121.16911.08341.0111.01090.96040.98761.007
SGI 1.05751.04361.03361.03831.04531.05291.0631.0731.07971.0856
DEPI 2.27512.04471.79171.23021.04461.04891.05341.09271.06671.0182
SGAI 0.970.99151.00381.03341.0311.03581.03491.02851.03711.044
LVGI 1.11811.14741.13661.05960.87430.86120.85780.93721.06331.0902
TATA -0.055-0.0643-0.0625-0.02790.00590.01540.0143-0.0186-0.04-0.0447
M-score -2.49-2.63-2.62-2.53-2.52-2.42-2.50-2.58-2.72-2.72
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