Switch to:
KLA-Tencor Corp (NAS:KLAC)
Beneish M-Score
-1.97 (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.

KLA-Tencor Corp has a M-score of -2.36 suggests that the company is not a manipulator.

KLAC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.23   Max: -0.16
Current: -1.97

-4.23
-0.16

During the past 13 years, the highest Beneish M-Score of KLA-Tencor Corp was -0.16. The lowest was -4.23. And the median was -2.62.


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 KLA-Tencor 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 * 0.9876+0.528 * 0.9311+0.404 * 1.3083+0.892 * 1.0606+0.115 * 1.0504
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8792+4.679 * -0.0124-0.327 * 0.9458
=-2.36

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $613 Mil.
Revenue was $2,984 Mil.
Gross Profit was $1,821 Mil.
Total Current Assets was $3,868 Mil.
Total Assets was $4,962 Mil.
Property, Plant and Equipment(Net PPE) was $278 Mil.
Depreciation, Depletion and Amortization(DDA) was $67 Mil.
Selling, General & Admin. Expense(SGA) was $379 Mil.
Total Current Liabilities was $1,002 Mil.
Long-Term Debt was $3,058 Mil.
Net Income was $704 Mil.
Non Operating Income was $6 Mil.
Cash Flow from Operations was $760 Mil.
Accounts Receivable was $585 Mil.
Revenue was $2,814 Mil.
Gross Profit was $1,599 Mil.
Total Current Assets was $3,905 Mil.
Total Assets was $4,826 Mil.
Property, Plant and Equipment(Net PPE) was $315 Mil.
Depreciation, Depletion and Amortization(DDA) was $81 Mil.
Selling, General & Admin. Expense(SGA) was $407 Mil.
Total Current Liabilities was $1,002 Mil.
Long-Term Debt was $3,173 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)
=(613.233 / 2984.493) / (585.494 / 2814.049)
=0.20547309 / 0.20806105
=0.9876

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)
=(1598.82 / 2814.049) / (1821.102 / 2984.493)
=0.56815642 / 0.61018806
=0.9311

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 - (3868.032 + 278.014) / 4962.432) / (1 - (3904.576 + 314.591) / 4826.012)
=0.16451329 / 0.12574461
=1.3083

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
=2984.493 / 2814.049
=1.0606

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))
=(80.536 / (80.536 + 314.591)) / (66.932 / (66.932 + 278.014))
=0.20382307 / 0.19403617
=1.0504

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)
=(379.399 / 2984.493) / (406.864 / 2814.049)
=0.12712343 / 0.14458313
=0.8792

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)
=((3057.936 + 1002.423) / 4962.432) / ((3173.435 + 1001.763) / 4826.012)
=0.81821957 / 0.86514455
=0.9458

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
=(704.422 - 6.127 - 759.696) / 4962.432
=-0.0124

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.

KLA-Tencor Corp has a M-score of -2.36 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.

KLA-Tencor Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.00220.91730.70781.74870.75991.20350.83470.91171.23660.9876
GMI 0.9661.03371.2660.7810.91481.03911.02830.97511.01930.9311
AQI 1.53491.4060.84720.83920.74290.81350.92360.93831.12371.3083
SGI 1.3190.92330.60281.19771.74390.9990.89621.03050.96061.0606
DEPI 0.67180.84780.82581.17851.07561.00581.1181.10880.98611.0504
SGAI 0.91620.98491.47470.72680.58621.00981.16110.96321.10040.8792
LVGI 0.99281.60731.06341.04480.89660.90630.96410.9742.9190.9458
TATA -0.0209-0.0688-0.2002-0.0639-0.0037-0.0357-0.07-0.0359-0.022-0.0124
M-score -2.11-2.98-4.08-2.04-2.09-2.49-3.07-2.71-2.99-2.36
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)
FEEDBACK