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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 -2.99.
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 * 0.854||+||0.528 * 0.9496||+||0.404 * 1.5521||+||0.892 * 1.1232||+||0.115 * 0.9834|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9014||+||4.679 * -0.0825||-||0.327 * 1.0053|
|This Year (May15) TTM:||Last Year (May14) TTM:|
|Accounts Receivable was $2,261 Mil.|
Revenue was 3853 + 4166 + 4573 + 4227 = $16,819 Mil.
Gross Profit was 1202 + 1405 + 1638 + 1385 = $5,630 Mil.
Total Current Assets was $10,008 Mil.
Total Assets was $25,136 Mil.
Property, Plant and Equipment(Net PPE) was $9,857 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,510 Mil.
Selling, General & Admin. Expense(SGA) was $729 Mil.
Total Current Liabilities was $4,566 Mil.
Long-Term Debt was $6,403 Mil.
Net Income was 491 + 934 + 1003 + 1150 = $3,578 Mil.
Non Operating Income was -16 + -6 + -49 + 198 = $127 Mil.
Cash Flow from Operations was 1335 + 1251 + 1592 + 1347 = $5,525 Mil.
|Accounts Receivable was $2,357 Mil.
Revenue was 3982 + 4107 + 4042 + 2843 = $14,974 Mil.
Gross Profit was 1368 + 1403 + 1281 + 708 = $4,760 Mil.
Total Current Assets was $9,705 Mil.
Total Assets was $20,495 Mil.
Property, Plant and Equipment(Net PPE) was $8,021 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,000 Mil.
Selling, General & Admin. Expense(SGA) was $720 Mil.
Total Current Liabilities was $4,760 Mil.
Long-Term Debt was $4,137 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)|
|=||(2261 / 16819)||/||(2357 / 14974)|
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)|
|=||(1405 / 14974)||/||(1202 / 16819)|
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 - (10008 + 9857) / 25136)||/||(1 - (9705 + 8021) / 20495)|
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))|
|=||(2000 / (2000 + 8021))||/||(2510 / (2510 + 9857))|
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)|
|=||(729 / 16819)||/||(720 / 14974)|
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)|
|=||((6403 + 4566) / 25136)||/||((4137 + 4760) / 20495)|
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|
|=||(3578 - 127||-||5525)||/||25136|
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