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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 -1.90 signals that the company is a manipulator.

MDT' s 10-Year Beneish M-Score Range
Min: -2.89   Max: -1.9
Current: -1.9

-2.89
-1.9

During the past 13 years, the highest Beneish M-Score of Medtronic PLC was -1.90. The lowest was -2.89. And the median was -2.44.


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 * 1.1258+0.528 * 1.0822+0.404 * 1.7643+0.892 * 1.1915+0.115 * 1.2055
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.991+4.679 * -0.0209-0.327 * 0.9617
=-1.90

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
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.
Net Income was -1 + 977 + 828 + 871 = $2,675 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1912 + 1767 + 913 + 310 = $4,902 Mil.
Accounts Receivable was $3,811 Mil.
Revenue was 4565 + 4163 + 4194 + 4083 = $17,005 Mil.
Gross Profit was 3394 + 3113 + 3104 + 3061 = $12,672 Mil.
Total Current Assets was $21,210 Mil.
Total Assets was $37,943 Mil.
Property, Plant and Equipment(Net PPE) was $2,392 Mil.
Depreciation, Depletion and Amortization(DDA) was $850 Mil.
Selling, General & Admin. Expense(SGA) was $5,847 Mil.
Total Current Liabilities was $5,559 Mil.
Long-Term Debt was $10,315 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)
=(5112 / 20261) / (3811 / 17005)
=0.25230739 / 0.22411056
=1.1258

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)
=(3190 / 17005) / (4370 / 20261)
=0.74519259 / 0.68861359
=1.0822

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 - (30844 + 4699) / 106685) / (1 - (21210 + 2392) / 37943)
=0.66684164 / 0.37796168
=1.7643

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
=20261 / 17005
=1.1915

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))
=(850 / (850 + 2392)) / (1306 / (1306 + 4699))
=0.26218384 / 0.21748543
=1.2055

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)
=(6904 / 20261) / (5847 / 17005)
=0.34075317 / 0.34384005
=0.991

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)
=((33752 + 9173) / 106685) / ((10315 + 5559) / 37943)
=0.40235272 / 0.41836439
=0.9617

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
=(2675 - 0 - 4902) / 106685
=-0.0209

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 -1.90 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 0.85321.2971.1671.03050.95931.09630.69090.97720.90611.7643
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 1.56150.82941.00810.94741.07780.98150.96030.9691.06650.9617
TATA 0.03090.0089-0.0567-0.0766-0.0367-0.0212-0.026-0.0423-0.0499-0.0209
M-score -2.53-2.15-2.52-2.89-2.61-2.40-2.72-2.69-2.76-1.90

Medtronic PLC Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 0.94180.95481.02551.02190.9960.99760.9860.95460.95091.1258
GMI 1.00811.01121.01311.01321.01121.00821.00851.00551.00711.0822
AQI 1.05660.97720.6350.61320.5820.90610.92930.95880.68851.7643
SGI 1.02321.02511.02581.02731.02881.0251.03181.0361.03681.1915
DEPI 1.041.0180.9880.96550.94230.9440.95640.96680.97481.2055
SGAI 0.93171.03431.03081.03171.0471.00111.00791.01181.00720.991
LVGI 1.01730.9691.00311.00831.00191.06651.05391.03531.42730.9617
TATA -0.0328-0.0434-0.0308-0.0281-0.0385-0.0499-0.0347-0.0323-0.0216-0.0209
M-score -2.63-2.70-2.73-2.73-2.82-2.76-2.67-2.67-2.86-1.90
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