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Medtronic PLC (NYSE:MDT)
Beneish M-Score
-1.45 (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.

Medtronic PLC has a M-score of -1.45 signals that the company is a manipulator.

MDT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.96   Max: -0.27
Current: -1.45

-2.96
-0.27

During the past 13 years, the highest Beneish M-Score of Medtronic PLC was -0.27. The lowest was -2.96. And the median was -2.48.


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 Medtronic PLC 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 * 0.8359+0.528 * 1.122+0.404 * 2.5711+0.892 * 1.6305+0.115 * 0.7088
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9661+4.679 * -0.0328-0.327 * 0.6973
=-1.45

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $4,863 Mil.
Revenue was 6934 + 7058 + 7274 + 7304 = $28,570 Mil.
Gross Profit was 4793 + 4876 + 4818 + 4370 = $18,857 Mil.
Total Current Assets was $27,569 Mil.
Total Assets was $102,706 Mil.
Property, Plant and Equipment(Net PPE) was $4,636 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,789 Mil.
Selling, General & Admin. Expense(SGA) was $9,513 Mil.
Total Current Liabilities was $8,141 Mil.
Long-Term Debt was $33,681 Mil.
Net Income was 1095 + 520 + 820 + -1 = $2,434 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1797 + 1279 + 816 + 1912 = $5,804 Mil.
Accounts Receivable was $3,568 Mil.
Revenue was 4318 + 4366 + 4273 + 4565 = $17,522 Mil.
Gross Profit was 3190 + 3224 + 3168 + 3394 = $12,976 Mil.
Total Current Assets was $38,161 Mil.
Total Assets was $55,233 Mil.
Property, Plant and Equipment(Net PPE) was $2,326 Mil.
Depreciation, Depletion and Amortization(DDA) was $844 Mil.
Selling, General & Admin. Expense(SGA) was $6,039 Mil.
Total Current Liabilities was $5,613 Mil.
Long-Term Debt was $26,641 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)
=(4863 / 28570) / (3568 / 17522)
=0.17021351 / 0.20362972
=0.8359

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)
=(4876 / 17522) / (4793 / 28570)
=0.74055473 / 0.660028
=1.122

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 - (27569 + 4636) / 102706) / (1 - (38161 + 2326) / 55233)
=0.68643507 / 0.26697807
=2.5711

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
=28570 / 17522
=1.6305

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))
=(844 / (844 + 2326)) / (2789 / (2789 + 4636))
=0.26624606 / 0.3756229
=0.7088

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)
=(9513 / 28570) / (6039 / 17522)
=0.33297165 / 0.34465244
=0.9661

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)
=((33681 + 8141) / 102706) / ((26641 + 5613) / 55233)
=0.40720114 / 0.58396249
=0.6973

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
=(2434 - 0 - 5804) / 102706
=-0.0328

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.

Medtronic PLC has a M-score of -1.45 signals that the company is likely to 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.

Medtronic PLC Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 0.94321.03451.09290.87960.98571.13770.98090.95480.99761.1258
GMI 1.0081.01110.99650.981611.0060.99311.01121.00821.0822
AQI 0.85321.2971.1671.03050.95931.09630.69090.97880.90461.7643
SGI 1.12311.08921.09891.08021.08341.00731.01581.02511.0251.1915
DEPI 0.88981.01720.98890.94960.97080.99690.96261.0180.9441.2055
SGAI 1.01391.0421.03141.01331.03710.94881.00050.98851.00110.991
LVGI 1.56150.82941.00810.94741.07780.98150.96030.96651.06930.9617
TATA 0.03080.0089-0.017-0.0737-0.0455-0.0303-0.0149-0.045-0.0499-0.0209
M-score -2.53-2.15-2.33-2.85-2.68-2.43-2.67-2.70-2.76-1.90

Medtronic PLC Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 1.02190.9960.99760.9860.95460.95091.12580.96370.90.8359
GMI 1.01321.01121.00821.00851.00551.00711.08221.10811.11721.122
AQI 0.61320.5820.90460.92930.95880.68851.76431.7641.78372.5711
SGI 1.02731.02881.0251.03181.0361.03681.19151.35281.49441.6305
DEPI 0.96550.94230.9440.95640.96680.97481.20550.95620.80920.7088
SGAI 1.03171.0471.00111.00791.01181.00720.9910.9770.96740.9661
LVGI 1.00831.00191.06931.05391.03531.42730.96170.94240.92750.6973
TATA -0.0281-0.0385-0.0499-0.0347-0.0323-0.0216-0.0209-0.0266-0.033-0.0328
M-score -2.73-2.82-2.76-2.67-2.67-2.86-1.90-1.94-1.90-1.45
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