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Medtronic PLC (NYSE:MDT)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

MDT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.93   Max: -0.27
Current: -2.38

-2.93
-0.27

During the past 13 years, the highest Beneish M-Score of Medtronic PLC was -0.27. The lowest was -2.93. 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 * 0.7646+0.528 * 1.0083+0.404 * 1.0722+0.892 * 1.4231+0.115 * 0.5908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9638+4.679 * -0.0168-0.327 * 0.9319
=-2.38

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $5,562 Mil.
Revenue was 7567 + 6934 + 7058 + 7274 = $28,833 Mil.
Gross Profit was 5204 + 4793 + 4876 + 4818 = $19,691 Mil.
Total Current Assets was $23,600 Mil.
Total Assets was $99,782 Mil.
Property, Plant and Equipment(Net PPE) was $4,841 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,820 Mil.
Selling, General & Admin. Expense(SGA) was $9,469 Mil.
Total Current Liabilities was $7,165 Mil.
Long-Term Debt was $30,247 Mil.
Net Income was 1103 + 1095 + 520 + 820 = $3,538 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1326 + 1797 + 1279 + 816 = $5,218 Mil.
Accounts Receivable was $5,112 Mil.
Revenue was 7304 + 4318 + 4366 + 4273 = $20,261 Mil.
Gross Profit was 4370 + 3190 + 3224 + 3168 = $13,952 Mil.
Total Current Assets was $30,844 Mil.
Total Assets was $106,685 Mil.
Property, Plant and Equipment(Net PPE) was $4,699 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,306 Mil.
Selling, General & Admin. Expense(SGA) was $6,904 Mil.
Total Current Liabilities was $9,173 Mil.
Long-Term Debt was $33,752 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)
=(5562 / 28833) / (5112 / 20261)
=0.19290396 / 0.25230739
=0.7646

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)
=(13952 / 20261) / (19691 / 28833)
=0.68861359 / 0.68293275
=1.0083

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 - (23600 + 4841) / 99782) / (1 - (30844 + 4699) / 106685)
=0.71496863 / 0.66684164
=1.0722

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
=28833 / 20261
=1.4231

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))
=(1306 / (1306 + 4699)) / (2820 / (2820 + 4841))
=0.21748543 / 0.36809816
=0.5908

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)
=(9469 / 28833) / (6904 / 20261)
=0.32840842 / 0.34075317
=0.9638

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)
=((30247 + 7165) / 99782) / ((33752 + 9173) / 106685)
=0.37493736 / 0.40235272
=0.9319

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
=(3538 - 0 - 5218) / 99782
=-0.0168

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 -2.38 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

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 1.03451.09290.87960.98571.13770.98090.95480.99761.12580.7646
GMI 1.01110.99650.981611.0060.99311.01121.00821.08221.0083
AQI 1.2971.1671.03050.95931.09630.69090.97720.90611.76431.0722
SGI 1.08921.09891.08021.08341.00731.01581.02511.0251.19151.4231
DEPI 1.01720.98890.94960.97080.99690.96261.0180.9441.20550.5908
SGAI 1.0421.03141.01331.03710.94881.00050.98851.00110.9910.9638
LVGI 0.82941.00810.94741.07780.98150.96030.9691.06650.96170.9319
TATA 0.0089-0.017-0.0737-0.0455-0.0303-0.0149-0.0449-0.0499-0.0209-0.0168
M-score -2.15-2.33-2.85-2.68-2.43-2.67-2.70-2.76-1.90-2.38

Medtronic PLC Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.9960.99760.9860.95460.95091.12580.96370.90.83590.7646
GMI 1.01121.00821.00851.00551.00711.08221.10811.11721.1221.0083
AQI 0.5820.90610.92930.95880.68851.76431.7641.78372.57111.0722
SGI 1.02881.0251.03181.0361.03681.19151.35281.49441.63051.4231
DEPI 0.94230.9440.95640.96680.97481.20550.95620.80920.70880.5908
SGAI 1.0471.00111.00791.01181.00720.9910.9770.96740.96610.9638
LVGI 1.00191.06651.05391.03531.42730.96170.94240.92750.69730.9319
TATA -0.0385-0.0499-0.0347-0.0323-0.0216-0.0209-0.0266-0.033-0.0328-0.0168
M-score -2.82-2.76-2.67-2.67-2.86-1.90-1.94-1.90-1.45-2.38
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