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GuruFocus has detected 6 Warning Signs with Intel Corp $INTC.
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Intel Corp (NAS:INTC)
Beneish M-Score
-2.88 (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.

Intel Corp has a M-score of -2.88 suggests that the company is not a manipulator.

INTC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.51   Max: -2.31
Current: -2.88

-3.51
-2.31

During the past 13 years, the highest Beneish M-Score of Intel Corp was -2.31. The lowest was -3.51. And the median was -2.94.


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 Intel Corp 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 * 0.9132+0.528 * 1.028+0.404 * 1.192+0.892 * 1.0728+0.115 * 1.2117
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.987+4.679 * -0.1065-0.327 * 1.0275
=-2.88

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $4,690 Mil.
Revenue was 16374 + 15778 + 13533 + 13702 = $59,387 Mil.
Gross Profit was 10105 + 9983 + 7973 + 8130 = $36,191 Mil.
Total Current Assets was $35,508 Mil.
Total Assets was $113,327 Mil.
Property, Plant and Equipment(Net PPE) was $36,171 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,790 Mil.
Selling, General & Admin. Expense(SGA) was $8,397 Mil.
Total Current Liabilities was $20,302 Mil.
Long-Term Debt was $20,649 Mil.
Net Income was 3562 + 3378 + 1330 + 2046 = $10,316 Mil.
Non Operating Income was 9 + -20 + 488 + 96 = $573 Mil.
Cash Flow from Operations was 8150 + 5758 + 3845 + 4055 = $21,808 Mil.
Accounts Receivable was $4,787 Mil.
Revenue was 14914 + 14465 + 13195 + 12781 = $55,355 Mil.
Gross Profit was 9590 + 9111 + 8248 + 7730 = $34,679 Mil.
Total Current Assets was $38,320 Mil.
Total Assets was $101,459 Mil.
Property, Plant and Equipment(Net PPE) was $31,858 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,711 Mil.
Selling, General & Admin. Expense(SGA) was $7,930 Mil.
Total Current Liabilities was $15,646 Mil.
Long-Term Debt was $20,036 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)
=(4690 / 59387) / (4787 / 55355)
=0.07897351 / 0.08647819
=0.9132

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)
=(34679 / 55355) / (36191 / 59387)
=0.62648361 / 0.60940947
=1.028

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 - (35508 + 36171) / 113327) / (1 - (38320 + 31858) / 101459)
=0.36750289 / 0.30831173
=1.192

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
=59387 / 55355
=1.0728

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))
=(8711 / (8711 + 31858)) / (7790 / (7790 + 36171))
=0.2147206 / 0.17720252
=1.2117

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)
=(8397 / 59387) / (7930 / 55355)
=0.14139458 / 0.14325716
=0.987

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)
=((20649 + 20302) / 113327) / ((20036 + 15646) / 101459)
=0.36135255 / 0.35168886
=1.0275

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
=(10316 - 573 - 21808) / 113327
=-0.1065

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.

Intel Corp has a M-score of -2.88 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.

Intel Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.87770.67781.42061.01571.02851.06310.94571.1661.09140.9132
GMI 0.99170.93630.99590.85261.04481.00591.03920.93831.01741.028
AQI 1.03350.96741.07360.78111.40450.97531.05341.07770.9161.192
SGI 1.08340.98050.93461.24191.23790.98780.98811.060.99081.0728
DEPI 0.98751.06210.91731.1021.00760.9641.04080.99490.95281.2117
SGAI 0.81781.02951.55650.64060.98211.06341.01590.9490.98370.987
LVGI 0.8850.94081.01790.99411.4891.14850.93781.05521.15141.0275
TATA -0.1044-0.0749-0.1248-0.0881-0.1163-0.0951-0.1258-0.1003-0.079-0.1065
M-score -2.93-3.17-2.82-2.75-2.75-2.95-3.06-2.75-2.85-2.88

Intel Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.93371.1660.87651.07951.12081.09141.28991.1191.14990.9132
GMI 0.9350.93830.94840.97980.99891.01741.02551.03211.02171.028
AQI 1.0381.07771.05941.06320.94330.9161.29441.18791.17941.192
SGI 1.05031.061.05661.02481.00330.99081.0071.02471.05011.0728
DEPI 1.04670.99490.95620.94310.92730.95280.98571.05741.15591.2117
SGAI 0.95840.9490.92950.95720.96820.98371.0131.01671.01240.987
LVGI 0.99841.05521.04271.02291.19631.15141.22941.37391.10311.0275
TATA -0.1139-0.1003-0.1114-0.0893-0.0857-0.079-0.0724-0.0891-0.0836-0.1065
M-score -3.03-2.75-3.07-2.79-2.86-2.85-2.49-2.79-2.62-2.88
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