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ON Semiconductor Corp (NAS:ONNN)
Beneish M-Score
-2.67 (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 Corp has a M-score of -2.67 suggests that the company is not a manipulator.

ONNN' s 10-Year Beneish M-Score Range
Min: -3.8   Max: -2.33
Current: -2.67

-3.8
-2.33

During the past 13 years, the highest Beneish M-Score of ON Semiconductor Corp was -2.33. The lowest was -3.80. And the median was -2.64.


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 Corp 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 * 0.9584+0.528 * 0.9731+0.404 * 1.3675+0.892 * 1.1362+0.115 * 0.9023
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0486+4.679 * -0.0751-0.327 * 1.1037
=-2.67

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $418 Mil.
Revenue was 864.2 + 833.5 + 757.6 + 706.5 = $3,162 Mil.
Gross Profit was 277 + 284.1 + 273 + 250.8 = $1,085 Mil.
Total Current Assets was $1,806 Mil.
Total Assets was $3,823 Mil.
Property, Plant and Equipment(Net PPE) was $1,204 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $381 Mil.
Total Current Liabilities was $1,041 Mil.
Long-Term Debt was $983 Mil.
Net Income was 1.7 + 41.6 + 88 + 58.4 = $190 Mil.
Non Operating Income was -1.7 + -0.9 + -1.2 + -0.6 = $-4 Mil.
Cash Flow from Operations was 162.5 + 92.3 + 151.6 + 74.9 = $481 Mil.
Accounts Receivable was $383 Mil.
Revenue was 718 + 715.4 + 688.3 + 661 = $2,783 Mil.
Gross Profit was 243.6 + 249.2 + 231.8 + 204.5 = $929 Mil.
Total Current Assets was $1,707 Mil.
Total Assets was $3,294 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.



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)
=(417.5 / 3161.8) / (383.4 / 2782.7)
=0.13204504 / 0.13777985
=0.9584

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)
=(284.1 / 2782.7) / (277 / 3161.8)
=0.33388436 / 0.34312733
=0.9731

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 - (1805.8 + 1203.9) / 3823) / (1 - (1707.2 + 1074.2) / 3293.8)
=0.21273869 / 0.155565
=1.3675

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
=3161.8 / 2782.7
=1.1362

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))
=(211.8 / (211.8 + 1074.2)) / (268.8 / (268.8 + 1203.9))
=0.16469673 / 0.1825219
=0.9023

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)
=(380.9 / 3161.8) / (319.7 / 2782.7)
=0.12046935 / 0.11488842
=1.0486

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)
=((983 + 1040.8) / 3823) / ((760.6 + 819.2) / 3293.8)
=0.52937484 / 0.47962839
=1.1037

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
=(189.7 - -4.4 - 481.3) / 3823
=-0.0751

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 Corp has a M-score of -2.67 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 Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.22430.91390.96320.86581.5230.86341.0430.93061.11480.9584
GMI 0.97460.86341.01990.99091.08430.84911.41010.89120.98480.9731
AQI 1.04881.0171.74381.34660.98091.06690.69710.95990.97381.3675
SGI 0.9951.21511.02251.3120.86091.30781.4880.8410.96121.1362
DEPI 1.00751.4690.96950.84240.86141.11650.94460.94731.09810.9023
SGAI 1.05940.95020.97581.1041.01960.93460.94531.04790.97391.0486
LVGI 0.92310.92130.84770.64760.91020.8991.08480.92940.94881.1037
TATA -0.0779-0.0543-0.0457-0.3491-0.0862-0.0869-0.1355-0.1095-0.0532-0.0751
M-score -2.62-2.60-2.35-3.74-2.48-2.73-2.57-3.26-2.64-2.67

ON Semiconductor Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.84070.93061.01831.06141.09651.11481.12921.02011.06110.9584
GMI 0.94150.89120.94130.99071.00740.98480.93970.91530.9360.9731
AQI 0.95180.95990.97140.98060.95510.97380.88350.94271.40611.3675
SGI 0.91670.8410.84780.87320.92030.96121.00591.05171.09861.1362
DEPI 0.94790.94730.96910.98181.00111.09811.07031.0591.00340.9023
SGAI 1.01281.04791.02781.02691.02180.97390.99170.98791.01131.0486
LVGI 0.92060.92940.92410.92770.93570.94880.97730.97361.08491.1037
TATA -0.0656-0.1095-0.1176-0.104-0.1096-0.0532-0.0398-0.0531-0.0579-0.0751
M-score -3.04-3.26-3.18-3.02-2.97-2.64-2.60-2.71-2.51-2.67
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