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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.
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.
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 * 0.7517||+||0.528 * 0.8673||+||0.404 * 1.4609||+||0.892 * 1.2733||+||0.115 * 0.9503|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8565||+||4.679 * -0.0787||-||0.327 * 0.8671|
|This Year (Feb15) TTM:||Last Year (Feb14) TTM:|
|Accounts Receivable was $2,439 Mil.|
Revenue was 4166 + 4573 + 4227 + 3982 = $16,948 Mil.
Gross Profit was 1405 + 1638 + 1385 + 1368 = $5,796 Mil.
Total Current Assets was $9,918 Mil.
Total Assets was $23,818 Mil.
Property, Plant and Equipment(Net PPE) was $9,233 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,379 Mil.
Selling, General & Admin. Expense(SGA) was $734 Mil.
Total Current Liabilities was $4,120 Mil.
Long-Term Debt was $5,519 Mil.
Net Income was 934 + 1003 + 1150 + 806 = $3,893 Mil.
Non Operating Income was -6 + -49 + 198 + -21 = $122 Mil.
Cash Flow from Operations was 1251 + 1592 + 1347 + 1455 = $5,645 Mil.
|Accounts Receivable was $2,548 Mil.
Revenue was 4107 + 4042 + 2843 + 2318 = $13,310 Mil.
Gross Profit was 1403 + 1281 + 708 + 556 = $3,948 Mil.
Total Current Assets was $9,991 Mil.
Total Assets was $20,615 Mil.
Property, Plant and Equipment(Net PPE) was $7,859 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,900 Mil.
Selling, General & Admin. Expense(SGA) was $673 Mil.
Total Current Liabilities was $5,305 Mil.
Long-Term Debt was $4,317 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(2439 / 16948)||/||(2548 / 13310)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1638 / 13310)||/||(1405 / 16948)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (9918 + 9233) / 23818)||/||(1 - (9991 + 7859) / 20615)|
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.
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))|
|=||(1900 / (1900 + 7859))||/||(2379 / (2379 + 9233))|
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)|
|=||(734 / 16948)||/||(673 / 13310)|
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)|
|=||((5519 + 4120) / 23818)||/||((4317 + 5305) / 20615)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(3893 - 122||-||5645)||/||23818|
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 -2.65 suggests that the company will not be a manipulator.
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
Micron Technology Inc Annual Data
Micron Technology Inc Quarterly Data