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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.
Micron Technology Inc has a M-score of -2.68 suggests that the company is not a 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 -2.80.
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 * 0.6766||+||0.528 * 0.6125||+||0.404 * 1.1757||+||0.892 * 1.8029||+||0.115 * 0.9811|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6978||+||4.679 * -0.1169||-||0.327 * 0.9676|
|This Year (Aug14) TTM:||Last Year (Aug13) TTM:|
|Accounts Receivable was $2,524 Mil.|
Revenue was 4227 + 3982 + 4107 + 4042 = $16,358 Mil.
Gross Profit was 1385 + 1368 + 1403 + 1281 = $5,437 Mil.
Total Current Assets was $10,245 Mil.
Total Assets was $22,498 Mil.
Property, Plant and Equipment(Net PPE) was $8,682 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,103 Mil.
Selling, General & Admin. Expense(SGA) was $707 Mil.
Total Current Liabilities was $4,811 Mil.
Long-Term Debt was $4,955 Mil.
Net Income was 1150 + 806 + 731 + 358 = $3,045 Mil.
Non Operating Income was 198 + -21 + -122 + -80 = $-25 Mil.
Cash Flow from Operations was 1347 + 1455 + 1390 + 1507 = $5,699 Mil.
|Accounts Receivable was $2,069 Mil.
Revenue was 2843 + 2318 + 2078 + 1834 = $9,073 Mil.
Gross Profit was 708 + 556 + 366 + 217 = $1,847 Mil.
Total Current Assets was $8,911 Mil.
Total Assets was $19,118 Mil.
Property, Plant and Equipment(Net PPE) was $7,626 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,804 Mil.
Selling, General & Admin. Expense(SGA) was $562 Mil.
Total Current Liabilities was $4,125 Mil.
Long-Term Debt was $4,452 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)|
|=||(2524 / 16358)||/||(2069 / 9073)|
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)|
|=||(1368 / 9073)||/||(1385 / 16358)|
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 - (10245 + 8682) / 22498)||/||(1 - (8911 + 7626) / 19118)|
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))|
|=||(1804 / (1804 + 7626))||/||(2103 / (2103 + 8682))|
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)|
|=||(707 / 16358)||/||(562 / 9073)|
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)|
|=||((4955 + 4811) / 22498)||/||((4452 + 4125) / 19118)|
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|
|=||(3045 - -25||-||5699)||/||22498|
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 -2.68 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