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Medtronic PLC (NYSE:MDT)
Beneish M-Score
-2.46 (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: -2.96   Max: -0.27
Current: -2.46

-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 -2.47.


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 * 1.0716+0.892 * 1.4231+0.115 * 0.5908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9638+4.679 * -0.0169-0.327 * 0.9297
=-2.38

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $5,562 Mil.
Revenue was $28,833 Mil.
Gross Profit was $19,691 Mil.
Total Current Assets was $23,600 Mil.
Total Assets was $99,644 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 $30,109 Mil.
Net Income was $3,538 Mil.
Non Operating Income was $0 Mil.
Cash Flow from Operations was $5,218 Mil.
Accounts Receivable was $5,112 Mil.
Revenue was $20,261 Mil.
Gross Profit was $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) / 99644) / (1 - (30844 + 4699) / 106685)
=0.71457388 / 0.66684164
=1.0716

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)
=((30109 + 7165) / 99644) / ((33752 + 9173) / 106685)
=0.3740717 / 0.40235272
=0.9297

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) / 99644
=-0.0169

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 local exchange's currency.

Medtronic PLC Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 1.03451.09290.87960.98571.16890.95470.95480.99761.12580.7646
GMI 1.01120.99650.981610.99681.00231.01121.00821.08221.0083
AQI 1.2971.1671.03050.95931.09630.69090.97880.90461.76431.0716
SGI 1.08921.09891.08021.08340.98051.04361.02511.0251.19151.4231
DEPI 1.01780.98890.94960.97080.99690.96261.0180.9441.20550.5908
SGAI 1.04211.03141.15370.8521.02220.99280.98851.00110.9910.9638
LVGI 0.82941.00810.94741.07780.98150.96030.96651.06930.96170.9297
TATA 0.0089-0.0518-0.0844-0.0455-0.0303-0.026-0.0423-0.0499-0.0209-0.0169
M-score -2.15-2.49-2.93-2.65-2.44-2.72-2.68-2.76-1.90-2.38
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