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Micron Technology Inc (NAS:MU)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

MU' s 10-Year Beneish M-Score Range
Min: -14.17   Max: 4.67
Current: -2.81

-14.17
4.67

During the past 13 years, the highest Beneish M-Score of Micron Technology Inc was 4.67. The lowest was -14.17. And the median was -3.00.


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 * 0.6068+0.528 * 0.7522+0.404 * 1.2193+0.892 * 1.4971+0.115 * 0.9697
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7813+4.679 * -0.0932-0.327 * 0.9035
=-2.81

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $2,301 Mil.
Revenue was 4573 + 4227 + 3982 + 4107 = $16,889 Mil.
Gross Profit was 1638 + 1385 + 1368 + 1403 = $5,794 Mil.
Total Current Assets was $9,672 Mil.
Total Assets was $22,542 Mil.
Property, Plant and Equipment(Net PPE) was $9,132 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,255 Mil.
Selling, General & Admin. Expense(SGA) was $724 Mil.
Total Current Liabilities was $4,419 Mil.
Long-Term Debt was $4,608 Mil.
Net Income was 1003 + 1150 + 806 + 731 = $3,690 Mil.
Non Operating Income was -49 + 198 + -21 + -122 = $6 Mil.
Cash Flow from Operations was 1592 + 1347 + 1455 + 1390 = $5,784 Mil.
Accounts Receivable was $2,533 Mil.
Revenue was 4042 + 2843 + 2318 + 2078 = $11,281 Mil.
Gross Profit was 1281 + 708 + 556 + 366 = $2,911 Mil.
Total Current Assets was $9,369 Mil.
Total Assets was $19,794 Mil.
Property, Plant and Equipment(Net PPE) was $7,733 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,838 Mil.
Selling, General & Admin. Expense(SGA) was $619 Mil.
Total Current Liabilities was $4,513 Mil.
Long-Term Debt was $4,260 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)
=(2301 / 16889) / (2533 / 11281)
=0.13624252 / 0.22453683
=0.6068

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)
=(1385 / 11281) / (1638 / 16889)
=0.2580445 / 0.34306353
=0.7522

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 - (9672 + 9132) / 22542) / (1 - (9369 + 7733) / 19794)
=0.1658238 / 0.13600081
=1.2193

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
=16889 / 11281
=1.4971

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))
=(1838 / (1838 + 7733)) / (2255 / (2255 + 9132))
=0.19203845 / 0.19803284
=0.9697

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)
=(724 / 16889) / (619 / 11281)
=0.04286814 / 0.05487102
=0.7813

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)
=((4608 + 4419) / 22542) / ((4260 + 4513) / 19794)
=0.40045249 / 0.44321512
=0.9035

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
=(3690 - 6 - 5784) / 22542
=-0.0932

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 -2.81 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.

Micron Technology Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
DSRI 0.92580.94080.84881.35990.94040.87850.86150.90122.01250.6766
GMI 1.27151.03091.202-20.12720.1028-0.28631.59951.70160.57750.6125
AQI 0.94082.03810.87360.71021.43151.33710.77291.10651.31861.1757
SGI 1.10811.08031.07891.02690.82231.7661.03610.9371.10191.8029
DEPI 0.96581.191.03980.90690.8041.04511.03490.94081.21070.9811
SGAI 0.88351.30611.22910.72640.94620.84461.08221.11780.82260.6978
LVGI 0.96880.67711.6021.11321.23630.79430.99391.25251.21720.9676
TATA -0.1307-0.1542-0.0906-0.1954-0.2681-0.1182-0.1501-0.2216-0.0987-0.1169
M-score -2.92-2.67-3.15-14.31-4.34-2.91-3.06-3.36-2.03-2.68

Micron Technology Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 0.90120.89211.13811.31892.01252.07571.54361.03170.67660.6068
GMI 1.70161.61751.21820.76750.57750.42750.4340.52140.61250.7522
AQI 1.10651.25711.42540.89261.31861.23191.18471.41821.17571.2193
SGI 0.9370.92490.96050.97411.10191.4141.6541.82771.80291.4971
DEPI 0.94081.02121.07921.11421.21071.14711.10891.0620.98110.9697
SGAI 1.11781.05430.8860.820.82260.74450.75770.77550.69780.7813
LVGI 1.25251.34231.29051.11741.21721.17481.19851.08780.96760.9035
TATA -0.2224-0.2166-0.1808-0.1456-0.0987-0.1265-0.13-0.1353-0.1169-0.0932
M-score -3.36-3.35-3.01-3.05-2.03-1.92-2.24-2.41-2.68-2.81
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