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Medtronic PLC (NYSE:MDT)
Beneish M-Score
-1.90 (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 -1.93 signals that the company is a manipulator.

MDT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.92   Max: -1.48
Current: -1.9

-2.92
-1.48

During the past 13 years, the highest Beneish M-Score of Medtronic PLC was -1.48. The lowest was -2.92. And the median was -2.45.


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 * 0.9233+0.528 * 1.0747+0.404 * 1.7837+0.892 * 1.4568+0.115 * 0.8092
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9649+4.679 * -0.0329-0.327 * 0.9275
=-1.93

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $5,044 Mil.
Revenue was 7058 + 7274 + 0 + 4318 = $18,650 Mil.
Gross Profit was 4876 + 4818 + 0 + 3190 = $12,884 Mil.
Total Current Assets was $28,723 Mil.
Total Assets was $104,945 Mil.
Property, Plant and Equipment(Net PPE) was $4,678 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,280 Mil.
Selling, General & Admin. Expense(SGA) was $6,279 Mil.
Total Current Liabilities was $8,126 Mil.
Long-Term Debt was $33,690 Mil.
Net Income was 520 + 820 + 0 + 977 = $2,317 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1279 + 816 + 1912 + 1767 = $5,774 Mil.
Accounts Receivable was $3,750 Mil.
Revenue was 4366 + 4273 + 0 + 4163 = $12,802 Mil.
Gross Profit was 3224 + 3168 + 0 + 3113 = $9,505 Mil.
Total Current Assets was $21,597 Mil.
Total Assets was $38,780 Mil.
Property, Plant and Equipment(Net PPE) was $2,361 Mil.
Depreciation, Depletion and Amortization(DDA) was $852 Mil.
Selling, General & Admin. Expense(SGA) was $4,467 Mil.
Total Current Liabilities was $6,952 Mil.
Long-Term Debt was $9,708 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)
=(5044 / 18650) / (3750 / 12802)
=0.27045576 / 0.29292298
=0.9233

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)
=(4818 / 12802) / (4876 / 18650)
=0.74246212 / 0.6908311
=1.0747

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 - (28723 + 4678) / 104945) / (1 - (21597 + 2361) / 38780)
=0.68172852 / 0.38220732
=1.7837

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
=18650 / 12802
=1.4568

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))
=(852 / (852 + 2361)) / (2280 / (2280 + 4678))
=0.26517274 / 0.32768037
=0.8092

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)
=(6279 / 18650) / (4467 / 12802)
=0.3366756 / 0.34892985
=0.9649

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)
=((33690 + 8126) / 104945) / ((9708 + 6952) / 38780)
=0.39845633 / 0.42960289
=0.9275

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
=(2317 - 0 - 5774) / 104945
=-0.0329

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 -1.93 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 0.94331.03451.09290.87960.98571.16890.95470.95480.99761.1258
GMI 1.0081.01120.99650.981610.99681.00231.01121.00821.0822
AQI 0.85321.2971.1671.03050.95931.09630.69090.97880.90461.7643
SGI 1.1231.08921.09891.08021.08340.98051.04361.02511.0251.1915
DEPI 0.88891.01780.98890.94960.97080.99690.96261.0180.9441.2055
SGAI 1.01371.04211.03141.15370.8521.02220.99280.98851.00110.991
LVGI 1.56150.82941.00810.94741.07780.98150.96030.96651.06930.9617
TATA 0.03090.0089-0.0567-0.0766-0.0367-0.0212-0.026-0.0423-0.0499-0.0209
M-score -2.53-2.15-2.52-2.89-2.61-2.40-2.72-2.68-2.76-1.90

Medtronic PLC Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.02991.02570.99910.99710.98310.95050.94661.28791.03190.9233
GMI 1.01261.01291.01011.01011.01051.00631.00851.00851.05571.0747
AQI 0.6350.61320.5820.90460.92930.95880.68851.76431.7641.7837
SGI 1.02141.02351.02561.02561.03481.04051.04161.04161.26351.4568
DEPI 0.9880.96550.94230.9440.95640.96680.97481.20550.95620.8092
SGAI 0.97470.97590.99470.99471.00381.0091.00291.00290.97950.9649
LVGI 1.00311.00831.00191.06931.05391.03531.42730.96170.94240.9275
TATA -0.0551-0.0514-0.0613-0.0617-0.0466-0.0439-0.0297-0.0209-0.0266-0.0329
M-score -2.83-2.83-2.91-2.81-2.73-2.73-2.90-1.93-1.98-1.93
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