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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 -14.31. And the median was -2.97.
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 * 0.8569||+||0.528 * 1.305||+||0.404 * 0.8626||+||0.892 * 0.8105||+||0.115 * 1.0416|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1648||+||4.679 * -0.1277||-||0.327 * 1.0857|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Feb16) TTM:||Last Year (Feb15) TTM:|
|Accounts Receivable was $1,694 Mil.|
Revenue was 2934 + 3350 + 3600 + 3853 = $13,737 Mil.
Gross Profit was 579 + 849 + 970 + 1202 = $3,600 Mil.
Total Current Assets was $8,805 Mil.
Total Assets was $24,819 Mil.
Property, Plant and Equipment(Net PPE) was $11,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,894 Mil.
Selling, General & Admin. Expense(SGA) was $693 Mil.
Total Current Liabilities was $4,411 Mil.
Long-Term Debt was $6,494 Mil.
Net Income was -97 + 206 + 471 + 491 = $1,071 Mil.
Non Operating Income was -6 + -4 + 18 + -16 = $-8 Mil.
Cash Flow from Operations was 763 + 1120 + 1030 + 1335 = $4,248 Mil.
|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.
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)|
|=||(1694 / 13737)||/||(2439 / 16948)|
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)|
|=||(5796 / 16948)||/||(3600 / 13737)|
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 - (8805 + 11819) / 24819)||/||(1 - (9918 + 9233) / 23818)|
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))|
|=||(2379 / (2379 + 9233))||/||(2894 / (2894 + 11819))|
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)|
|=||(693 / 13737)||/||(734 / 16948)|
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)|
|=||((6494 + 4411) / 24819)||/||((5519 + 4120) / 23818)|
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|
|=||(1071 - -8||-||4248)||/||24819|
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 -3.32 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