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Check Point Software Technologies Ltd (NAS:CHKP)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

CHKP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: 49.78
Current: -2.71

-3.25
49.78

During the past 13 years, the highest Beneish M-Score of Check Point Software Technologies Ltd was 49.78. The lowest was -3.25. And the median was -2.50.


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 * 1.0204+0.528 * 0.9985+0.404 * 0.9809+0.892 * 1.0887+0.115 * 0.9629
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0802+4.679 * -0.0585-0.327 * 1.0897
=-2.71

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $247 Mil.
Revenue was 404.271 + 458.072 + 403.856 + 395.334 = $1,662 Mil.
Gross Profit was 359.262 + 403.352 + 356.452 + 349.731 = $1,469 Mil.
Total Current Assets was $1,666 Mil.
Total Assets was $5,014 Mil.
Property, Plant and Equipment(Net PPE) was $51 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $468 Mil.
Total Current Liabilities was $1,006 Mil.
Long-Term Debt was $0 Mil.
Net Income was 167.422 + 194.604 + 167.743 + 162.636 = $692 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 323.748 + 241.59 + 227.827 + 192.726 = $986 Mil.
Accounts Receivable was $222 Mil.
Revenue was 372.576 + 420.642 + 370.37 + 362.598 = $1,526 Mil.
Gross Profit was 331.246 + 368.719 + 325.641 + 321.587 = $1,347 Mil.
Total Current Assets was $1,576 Mil.
Total Assets was $4,911 Mil.
Property, Plant and Equipment(Net PPE) was $42 Mil.
Depreciation, Depletion and Amortization(DDA) was $12 Mil.
Selling, General & Admin. Expense(SGA) was $398 Mil.
Total Current Liabilities was $904 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)
=(246.714 / 1661.533) / (222.092 / 1526.186)
=0.14848577 / 0.14552093
=1.0204

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)
=(1347.193 / 1526.186) / (1468.797 / 1661.533)
=0.88271875 / 0.8840011
=0.9985

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 - (1665.602 + 50.728) / 5013.552) / (1 - (1576.268 + 41.951) / 4910.589)
=0.65766187 / 0.67046336
=0.9809

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
=1661.533 / 1526.186
=1.0887

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))
=(11.534 / (11.534 + 41.951)) / (14.64 / (14.64 + 50.728))
=0.21564925 / 0.2239628
=0.9629

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)
=(467.785 / 1661.533) / (397.764 / 1526.186)
=0.28153819 / 0.26062616
=1.0802

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 + 1005.959) / 5013.552) / ((0 + 904.229) / 4910.589)
=0.20064796 / 0.1841386
=1.0897

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
=(692.405 - 0 - 985.891) / 5013.552
=-0.0585

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 -2.71 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 1.32461.40710.99551.13691.00170.94241.01111.16910.97081.0042
SGI 0.99271.27081.10621.14341.18761.13581.07681.03831.0731.0896
DEPI 2.97490.54370.83650.90720.98591.04912.0361.23021.09270.958
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 -0.0405-0.0402-0.0339-0.0616-0.0587-0.0416-0.0505-0.025-0.0181-0.0515
M-score -2.21-2.23-2.42-2.63-2.72-2.47-2.56-2.51-2.58-2.67

Check Point Software Technologies Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.97830.79620.88390.7930.90020.89490.91290.92971.0281.0204
GMI 0.99790.99980.9990.99991.00151.0011.00231.00020.99770.9985
AQI 1.16911.08341.0111.01090.96040.98761.0070.9861.0150.9809
SGI 1.03831.04531.05291.0631.0731.07971.08561.0891.08961.0887
DEPI 1.23021.04461.04891.05341.09271.06671.01820.96110.9580.9629
SGAI 1.03341.0311.03581.03491.02851.03711.0441.06381.07721.0802
LVGI 1.05960.87430.86120.85780.93721.06331.09021.1161.10591.0897
TATA -0.0280.00580.01530.0141-0.0189-0.0403-0.045-0.0491-0.0515-0.0585
M-score -2.53-2.53-2.42-2.50-2.58-2.72-2.73-2.75-2.66-2.71
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