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ON Semiconductor Corp (NAS:ONNN)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

ONNN' s 10-Year Beneish M-Score Range
Min: -4.48   Max: -0.99
Current: -2.58

-4.48
-0.99

During the past 13 years, the highest Beneish M-Score of ON Semiconductor Corp was -0.99. The lowest was -4.48. And the median was -2.70.


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 * 1.1601+0.528 * 0.9309+0.404 * 0.8835+0.892 * 1.0059+0.115 * 1.0703
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9917+4.679 * -0.0402-0.327 * 0.9773
=-2.58

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $448 Mil.
Revenue was 706.5 + 718 + 715.4 + 688.3 = $2,828 Mil.
Gross Profit was 250.8 + 252.9 + 249.2 + 231.8 = $985 Mil.
Total Current Assets was $1,737 Mil.
Total Assets was $3,287 Mil.
Property, Plant and Equipment(Net PPE) was $1,081 Mil.
Depreciation, Depletion and Amortization(DDA) was $213 Mil.
Selling, General & Admin. Expense(SGA) was $329 Mil.
Total Current Liabilities was $824 Mil.
Long-Term Debt was $747 Mil.
Net Income was 58.4 + 28.7 + 51.8 + 47.7 = $187 Mil.
Non Operating Income was -0.6 + -0.5 + -1.4 + 4.1 = $2 Mil.
Cash Flow from Operations was 74.9 + 127 + 59.9 + 55.2 = $317 Mil.
Accounts Receivable was $384 Mil.
Revenue was 661 + 680.2 + 725.5 + 744.8 = $2,812 Mil.
Gross Profit was 204.5 + 210.4 + 238 + 258.3 = $911 Mil.
Total Current Assets was $1,618 Mil.
Total Assets was $3,233 Mil.
Property, Plant and Equipment(Net PPE) was $1,094 Mil.
Depreciation, Depletion and Amortization(DDA) was $234 Mil.
Selling, General & Admin. Expense(SGA) was $330 Mil.
Total Current Liabilities was $874 Mil.
Long-Term Debt was $707 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)
=(447.9 / 2828.2) / (383.8 / 2811.5)
=0.15836928 / 0.13651076
=1.1601

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)
=(252.9 / 2811.5) / (250.8 / 2828.2)
=0.32409746 / 0.34817198
=0.9309

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 - (1737.3 + 1081.4) / 3286.7) / (1 - (1617.5 + 1094.2) / 3232.7)
=0.14239206 / 0.16116559
=0.8835

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
=2828.2 / 2811.5
=1.0059

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))
=(233.8 / (233.8 + 1094.2)) / (212.9 / (212.9 + 1081.4))
=0.17605422 / 0.16449046
=1.0703

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)
=(329.1 / 2828.2) / (329.9 / 2811.5)
=0.11636376 / 0.1173395
=0.9917

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)
=((746.5 + 824.2) / 3286.7) / ((706.8 + 874) / 3232.7)
=0.47789576 / 0.489003
=0.9773

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
=(186.6 - 1.6 - 317) / 3286.7
=-0.0402

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 -2.58 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

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 Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.13650.56610.71570.84070.93591.06441.11921.17551.10131.1601
GMI 1.41011.20771.05530.94150.89120.94130.99071.00740.97510.9309
AQI 0.69710.94180.96350.95180.95990.97140.98060.95510.90830.8835
SGI 1.4881.25911.06720.91670.8410.84780.87320.92030.96121.0059
DEPI 0.94460.84990.87430.94790.94730.96910.98181.00111.09811.0703
SGAI 0.94530.98621.01051.01281.04791.02781.02691.02180.97390.9917
LVGI 1.08480.94830.94060.92060.92940.92410.92770.93570.95950.9773
TATA -0.1355-0.1199-0.1095-0.0656-0.1095-0.1176-0.104-0.1096-0.0542-0.0402
M-score -2.48-3.12-3.18-3.04-3.26-3.13-2.97-2.90-2.70-2.58
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