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GuruFocus has detected 5 Warning Signs with Micron Technology Inc $MU.
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Micron Technology Inc (NAS:MU)
Beneish M-Score
-2.90 (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.

Micron Technology Inc has a M-score of -2.90 suggests that the company is not a manipulator.

MU' s Beneish M-Score Range Over the Past 10 Years
Min: -14.12   Max: 2.91
Current: -2.9

-14.12
2.91

During the past 13 years, the highest Beneish M-Score of Micron Technology Inc was 2.91. The lowest was -14.12. And the median was -2.97.


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 Micron Technology Inc 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 * 1.282+0.528 * 1.4434+0.404 * 0.5475+0.892 * 0.8697+0.115 * 1.2152
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0421+4.679 * -0.123-0.327 * 1.188
=-2.90

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

This Year (Nov16) TTM:Last Year (Nov15) TTM:
Accounts Receivable was $2,162 Mil.
Revenue was 3970 + 3217 + 2898 + 2934 = $13,019 Mil.
Gross Profit was 1011 + 579 + 498 + 579 = $2,667 Mil.
Total Current Assets was $9,504 Mil.
Total Assets was $27,836 Mil.
Property, Plant and Equipment(Net PPE) was $15,321 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,014 Mil.
Selling, General & Admin. Expense(SGA) was $639 Mil.
Total Current Liabilities was $5,546 Mil.
Long-Term Debt was $8,490 Mil.
Net Income was 180 + -170 + -215 + -97 = $-302 Mil.
Non Operating Income was -14 + -10 + -34 + -6 = $-64 Mil.
Cash Flow from Operations was 1138 + 896 + 389 + 763 = $3,186 Mil.
Accounts Receivable was $1,939 Mil.
Revenue was 3350 + 3600 + 3853 + 4166 = $14,969 Mil.
Gross Profit was 849 + 970 + 1202 + 1405 = $4,426 Mil.
Total Current Assets was $8,510 Mil.
Total Assets was $24,388 Mil.
Property, Plant and Equipment(Net PPE) was $11,060 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,761 Mil.
Selling, General & Admin. Expense(SGA) was $705 Mil.
Total Current Liabilities was $4,025 Mil.
Long-Term Debt was $6,326 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)
=(2162 / 13019) / (1939 / 14969)
=0.16606498 / 0.12953437
=1.282

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)
=(4426 / 14969) / (2667 / 13019)
=0.29567773 / 0.20485444
=1.4434

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 - (9504 + 15321) / 27836) / (1 - (8510 + 11060) / 24388)
=0.10816928 / 0.19755618
=0.5475

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
=13019 / 14969
=0.8697

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))
=(2761 / (2761 + 11060)) / (3014 / (3014 + 15321))
=0.19976847 / 0.16438506
=1.2152

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)
=(639 / 13019) / (705 / 14969)
=0.04908211 / 0.04709733
=1.0421

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)
=((8490 + 5546) / 27836) / ((6326 + 4025) / 24388)
=0.50423911 / 0.42443005
=1.188

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
=(-302 - -64 - 3186) / 27836
=-0.123

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.

Micron Technology Inc has a M-score of -2.90 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.

Micron Technology Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 0.84881.35990.94040.87850.86150.90122.01250.67660.87581.0534
GMI 1.202-20.12720.1028-0.28631.59951.70160.57750.61251.0321.5942
AQI 0.87360.71021.43151.33710.77291.10651.31861.15291.32870.5898
SGI 1.07891.02690.82231.7661.03610.9371.10191.80290.98990.7657
DEPI 1.03980.90690.8041.04511.03490.94081.21070.98110.96661.1959
SGAI 1.22910.72640.94620.84461.08221.11780.82260.69781.02741.1969
LVGI 1.6021.11321.23630.79430.99391.25251.21720.96290.97381.2074
TATA -0.0854-0.1954-0.2681-0.1182-0.1497-0.2216-0.0987-0.1173-0.0934-0.1231
M-score -3.12-14.31-4.34-2.91-3.06-3.36-2.03-2.69-2.89-3.15

Micron Technology Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 0.67660.60680.75170.8540.87580.95080.85691.01961.05341.282
GMI 0.61250.75220.86730.94961.0321.16031.3051.47741.59421.4434
AQI 1.15291.21931.46091.55211.32871.19140.86260.65030.58980.5475
SGI 1.80291.49711.27331.12320.98990.88630.81050.760.76570.8697
DEPI 0.98110.96970.95030.98340.96660.99131.04161.10381.19591.2152
SGAI 0.69780.78130.85650.90141.02741.09871.16481.2131.19691.0421
LVGI 0.96290.90350.86711.00530.97381.05991.08571.13891.20741.188
TATA -0.1173-0.0932-0.0787-0.0825-0.0934-0.1077-0.1277-0.1078-0.1231-0.123
M-score -2.69-2.81-2.65-2.68-2.89-3.01-3.32-3.14-3.15-2.90
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