Switch to:
Medtronic PLC (NYSE:MDT)
Beneish M-Score
-2.48 (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 -2.48 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: -2.48

-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 -2.48.


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 * 0.9017+0.528 * 0.9741+0.404 * 1.0533+0.892 * 1.2348+0.115 * 0.7445
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.975+4.679 * -0.0234-0.327 * 0.9752
=-2.48

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

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Accounts Receivable was $5,357 Mil.
Revenue was 7166 + 7567 + 6934 + 7058 = $28,725 Mil.
Gross Profit was 4905 + 5204 + 4793 + 4876 = $19,778 Mil.
Total Current Assets was $23,498 Mil.
Total Assets was $98,601 Mil.
Property, Plant and Equipment(Net PPE) was $4,814 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,856 Mil.
Selling, General & Admin. Expense(SGA) was $9,448 Mil.
Total Current Liabilities was $7,896 Mil.
Long-Term Debt was $30,124 Mil.
Net Income was 929 + 1103 + 1095 + 520 = $3,647 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1550 + 1326 + 1797 + 1279 = $5,952 Mil.
Accounts Receivable was $4,811 Mil.
Revenue was 7274 + 7304 + 4318 + 4366 = $23,262 Mil.
Gross Profit was 4818 + 4370 + 3190 + 3224 = $15,602 Mil.
Total Current Assets was $29,147 Mil.
Total Assets was $104,626 Mil.
Property, Plant and Equipment(Net PPE) was $4,672 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,792 Mil.
Selling, General & Admin. Expense(SGA) was $7,847 Mil.
Total Current Liabilities was $7,660 Mil.
Long-Term Debt was $33,709 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)
=(5357 / 28725) / (4811 / 23262)
=0.1864926 / 0.20681799
=0.9017

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)
=(15602 / 23262) / (19778 / 28725)
=0.67070759 / 0.68852916
=0.9741

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 - (23498 + 4814) / 98601) / (1 - (29147 + 4672) / 104626)
=0.71286295 / 0.67676295
=1.0533

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
=28725 / 23262
=1.2348

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))
=(1792 / (1792 + 4672)) / (2856 / (2856 + 4814))
=0.27722772 / 0.37235984
=0.7445

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)
=(9448 / 28725) / (7847 / 23262)
=0.3289121 / 0.33733127
=0.975

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)
=((30124 + 7896) / 98601) / ((33709 + 7660) / 104626)
=0.38559447 / 0.39539885
=0.9752

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
=(3647 - 0 - 5952) / 98601
=-0.0234

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 -2.48 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 1.03451.09290.87960.98571.16890.95470.95480.99761.12580.7646
GMI 1.01120.99650.981610.99681.00231.01121.00821.08221.0083
AQI 1.2971.1671.03050.95931.09630.69090.97720.90611.76431.0722
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 0.82941.00810.94741.07780.98150.96030.9691.06650.96170.9319
TATA 0.0089-0.0518-0.0844-0.0455-0.0303-0.026-0.0423-0.0499-0.0209-0.0168
M-score -2.15-2.49-2.93-2.65-2.44-2.72-2.69-2.76-1.90-2.38

Medtronic PLC Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 0.99760.9860.95460.95091.12580.96370.90.83590.76460.9017
GMI 1.00821.00851.00551.00711.08221.10811.11721.1221.00830.9741
AQI 0.90610.92930.95880.68851.76431.7641.78372.57111.07221.0533
SGI 1.0251.03181.0361.03681.19151.35281.49441.63051.42311.2348
DEPI 0.9440.95640.96680.97481.20550.95620.80920.70880.59080.7445
SGAI 1.00111.00791.01181.00720.9910.9770.96740.96610.96380.975
LVGI 1.06651.05391.03531.42730.96170.94240.92750.69730.93190.9752
TATA -0.0499-0.0347-0.0323-0.0216-0.0209-0.0266-0.033-0.0328-0.0168-0.0234
M-score -2.76-2.67-2.67-2.86-1.90-1.94-1.90-1.45-2.38-2.48
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK