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Medtronic PLC (NYSE:MDT)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

MDT' s 10-Year Beneish M-Score Range
Min: -2.92   Max: -1.48
Current: -2.86

-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 * 0.9509+0.528 * 1.0071+0.404 * 0.6885+0.892 * 1.0368+0.115 * 0.9748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0072+4.679 * -0.0216-0.327 * 1.4273
=-2.86

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
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.
Net Income was 977 + 828 + 871 + 448 = $3,124 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1767 + 913 + 310 + 1328 = $4,318 Mil.
Accounts Receivable was $3,619 Mil.
Revenue was 4163 + 4194 + 4083 + 4460 = $16,900 Mil.
Gross Profit was 3113 + 3104 + 3061 + 3326 = $12,604 Mil.
Total Current Assets was $20,386 Mil.
Total Assets was $37,231 Mil.
Property, Plant and Equipment(Net PPE) was $2,408 Mil.
Depreciation, Depletion and Amortization(DDA) was $844 Mil.
Selling, General & Admin. Expense(SGA) was $5,783 Mil.
Total Current Liabilities was $5,632 Mil.
Long-Term Debt was $9,601 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)
=(3568 / 17522) / (3619 / 16900)
=0.20362972 / 0.21414201
=0.9509

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)
=(3224 / 16900) / (3190 / 17522)
=0.74579882 / 0.74055473
=1.0071

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 - (38161 + 2326) / 55233) / (1 - (20386 + 2408) / 37231)
=0.26697807 / 0.38776826
=0.6885

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
=17522 / 16900
=1.0368

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 + 2408)) / (844 / (844 + 2326))
=0.2595326 / 0.26624606
=0.9748

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)
=(6039 / 17522) / (5783 / 16900)
=0.34465244 / 0.34218935
=1.0072

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)
=((26641 + 5613) / 55233) / ((9601 + 5632) / 37231)
=0.58396249 / 0.40914829
=1.4273

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
=(3124 - 0 - 4318) / 55233
=-0.0216

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 -2.86 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 own currency.

Medtronic PLC Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
DSRI 1.03910.94331.03451.09290.87960.98571.16890.95470.95480.9976
GMI 0.99381.0081.01120.99650.981610.99681.00231.01121.0082
AQI 0.87870.85321.2971.1671.03050.95931.09630.69090.97720.9061
SGI 1.10651.1231.08921.09891.08021.08340.98051.04361.02511.025
DEPI 1.0320.88891.01780.98890.94960.97080.99690.96261.0180.944
SGAI 1.03691.01371.04211.03141.15370.8521.02220.99280.98851.0011
LVGI 1.07171.56150.82941.00810.94741.07780.98150.96030.9691.0665
TATA -0.00420.03090.0089-0.0567-0.0766-0.0367-0.0212-0.026-0.0423-0.0499
M-score -2.45-2.53-2.15-2.52-2.89-2.61-2.40-2.72-2.69-2.76

Medtronic PLC Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.92260.94180.95481.02551.02190.9960.99760.9860.95460.9509
GMI 1.00331.00811.01121.01311.01321.01121.00821.00851.00551.0071
AQI 1.02171.05660.97720.6350.61320.5820.90610.92930.95880.6885
SGI 1.02031.02321.02511.02581.02731.02881.0251.03181.0361.0368
DEPI 0.99281.041.0180.9880.96550.94230.9440.95640.96680.9748
SGAI 0.95280.93171.03431.03081.03171.0471.00111.00791.01181.0072
LVGI 1.00861.01730.9691.00311.00831.00191.06651.05391.03531.4273
TATA -0.0268-0.0328-0.0434-0.0308-0.0281-0.0385-0.0499-0.0347-0.0323-0.0216
M-score -2.64-2.63-2.70-2.73-2.73-2.82-2.76-2.67-2.67-2.86
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