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ON Semiconductor Corporation (NAS:ONNN)
Beneish M-Score
-2.70 (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.

ON Semiconductor Corporation has a M-score of -2.70 suggests that the company is not a manipulator.

ONNN' s 10-Year Beneish M-Score Range
Min: -3.84   Max: -2.33
Current: -2.7

-3.84
-2.33

During the past 13 years, the highest Beneish M-Score of ON Semiconductor Corporation was -2.33. The lowest was -3.84. And the median was -2.66.


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 ON Semiconductor Corporation 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 * 1.1013+0.528 * 0.9751+0.404 * 0.9083+0.892 * 0.9612+0.115 * 1.0981
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9739+4.679 * -0.0542-0.327 * 0.9595
=-2.70

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $415 Mil.
Revenue was 718 + 715.4 + 688.3 + 661 = $2,783 Mil.
Gross Profit was 252.9 + 249.2 + 231.8 + 204.5 = $938 Mil.
Total Current Assets was $1,710 Mil.
Total Assets was $3,257 Mil.
Property, Plant and Equipment(Net PPE) was $1,074 Mil.
Depreciation, Depletion and Amortization(DDA) was $212 Mil.
Selling, General & Admin. Expense(SGA) was $320 Mil.
Total Current Liabilities was $819 Mil.
Long-Term Debt was $761 Mil.
Net Income was 28.7 + 51.8 + 47.7 + 22.6 = $151 Mil.
Non Operating Income was -0.5 + -1.4 + 4.1 + -2.2 = $-0 Mil.
Cash Flow from Operations was 127 + 59.9 + 55.2 + 85.2 = $327 Mil.
Accounts Receivable was $392 Mil.
Revenue was 680.2 + 725.5 + 744.8 + 744.4 = $2,895 Mil.
Gross Profit was 210.4 + 238 + 258.3 + 245.2 = $952 Mil.
Total Current Assets was $1,693 Mil.
Total Assets was $3,328 Mil.
Property, Plant and Equipment(Net PPE) was $1,103 Mil.
Depreciation, Depletion and Amortization(DDA) was $244 Mil.
Selling, General & Admin. Expense(SGA) was $342 Mil.
Total Current Liabilities was $1,024 Mil.
Long-Term Debt was $658 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)
=(415.1 / 2782.7) / (392.1 / 2894.9)
=0.14917167 / 0.13544509
=1.1013

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)
=(249.2 / 2894.9) / (252.9 / 2782.7)
=0.32881965 / 0.33722643
=0.9751

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 - (1710.2 + 1074.2) / 3257) / (1 - (1693.4 + 1103.3) / 3328.4)
=0.14510286 / 0.15974642
=0.9083

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
=2782.7 / 2894.9
=0.9612

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))
=(243.6 / (243.6 + 1103.3)) / (211.8 / (211.8 + 1074.2))
=0.18085975 / 0.16469673
=1.0981

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)
=(319.7 / 2782.7) / (341.5 / 2894.9)
=0.11488842 / 0.11796608
=0.9739

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)
=((760.6 + 819.2) / 3257) / ((658.3 + 1024.3) / 3328.4)
=0.48504759 / 0.50552818
=0.9595

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
=(150.8 - -4.4408920985E-16 - 327.3) / 3257
=-0.0542

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.

ON Semiconductor Corporation has a M-score of -2.70 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.

ON Semiconductor Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.81531.22430.91390.96320.82141.60520.86341.13650.93591.1013
GMI 0.87020.97460.86341.01990.99091.08430.84911.41010.89120.9751
AQI 0.75771.04881.0171.74381.34660.98091.06690.69710.95990.9083
SGI 1.1850.9951.21511.02251.3120.86091.30781.4880.8410.9612
DEPI 1.14131.00751.4690.96950.84240.86141.11650.94460.94731.0981
SGAI 0.96331.05940.95020.97581.1041.01960.93460.94531.04790.9739
LVGI 0.95160.92310.92130.84770.64760.91020.8991.08480.92940.9595
TATA 0.0016-0.0779-0.0543-0.0457-0.3491-0.0862-0.0869-0.1355-0.1095-0.0542
M-score -2.61-2.62-2.60-2.35-3.79-2.40-2.73-2.48-3.26-2.70

ON Semiconductor Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.17611.13650.56610.71570.84070.93591.06441.11921.17551.1013
GMI 1.32181.41011.20771.05530.94150.89120.94130.99071.00740.9751
AQI 0.80470.69710.94180.96350.95180.95990.97140.98060.95510.9083
SGI 1.45821.4881.25911.06720.91670.8410.84780.87320.92030.9612
DEPI 1.03860.94460.84990.87430.94790.94730.96910.98181.00111.0981
SGAI 0.97950.94530.98621.01051.01281.04791.02781.02691.02180.9739
LVGI 1.11521.08480.94830.94060.92060.92940.92410.92770.93570.9595
TATA -0.1176-0.1355-0.1199-0.1095-0.0656-0.1095-0.1176-0.104-0.1096-0.0542
M-score -2.40-2.48-3.12-3.18-3.04-3.26-3.13-2.97-2.90-2.70
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