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Check Point Software Technologies Ltd (NAS:CHKP)
Beneish M-Score
-2.61 (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 -2.61 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: -2.61

-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 * 1.0812+0.528 * 0.9985+0.404 * 1.0299+0.892 * 1.0755+0.115 * 1.1027
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.062+4.679 * -0.0568-0.327 * 1.07
=-2.61

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $255 Mil.
Revenue was 427.574 + 422.749 + 404.271 + 458.072 = $1,713 Mil.
Gross Profit was 377.404 + 374.651 + 359.262 + 403.352 = $1,515 Mil.
Total Current Assets was $1,529 Mil.
Total Assets was $5,003 Mil.
Property, Plant and Equipment(Net PPE) was $58 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $494 Mil.
Total Current Liabilities was $1,001 Mil.
Long-Term Debt was $0 Mil.
Net Income was 169.652 + 165.819 + 167.422 + 194.604 = $697 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 213.924 + 202.45 + 323.748 + 241.59 = $982 Mil.
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.



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)
=(254.716 / 1712.666) / (219.054 / 1592.408)
=0.14872485 / 0.13756148
=1.0812

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)
=(1406.148 / 1592.408) / (1514.669 / 1712.666)
=0.88303249 / 0.88439252
=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 - (1529.398 + 57.994) / 5003.258) / (1 - (1593.408 + 44.366) / 4858.168)
=0.68272833 / 0.66288239
=1.0299

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
=1712.666 / 1592.408
=1.0755

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))
=(13.176 / (13.176 + 44.366)) / (15.198 / (15.198 + 57.994))
=0.22898057 / 0.20764564
=1.1027

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)
=(494.158 / 1712.666) / (432.64 / 1592.408)
=0.28853145 / 0.27168917
=1.062

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 + 1001.372) / 5003.258) / ((0 + 908.701) / 4858.168)
=0.20014399 / 0.18704602
=1.07

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
=(697.497 - 0 - 981.712) / 5003.258
=-0.0568

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 -2.61 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 local exchange's 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 2.97490.54370.86350.87880.98591.04912.0361.23021.09270.958
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 -0.0405-0.0402-0.0339-0.0616-0.0652-0.0416-0.0432-0.0324-0.0255-0.0515
M-score -2.21-2.23-2.42-2.63-2.75-2.47-2.53-2.55-2.61-2.67

Check Point Software Technologies Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.88390.7930.90020.89490.91290.92971.0281.02041.03441.0812
GMI 0.9990.99991.00151.0011.00231.00020.99770.99850.99750.9985
AQI 1.0111.01090.96040.98761.0070.9861.0150.98090.98111.0299
SGI 1.05291.0631.0731.07971.08561.0891.08961.08871.08341.0755
DEPI 1.04891.05341.09271.06671.01820.96110.9580.96291.03981.1027
SGAI 1.03581.03491.02851.03711.0441.06381.07721.08021.07471.062
LVGI 0.86120.85780.93721.06331.09021.1161.10591.08971.09261.07
TATA 0.01530.0141-0.0189-0.0403-0.045-0.0491-0.0515-0.0585-0.0598-0.0568
M-score -2.42-2.50-2.58-2.72-2.73-2.75-2.66-2.71-2.70-2.61
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