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ON Semiconductor Corp (NAS:ONNN)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

ONNN' s 10-Year Beneish M-Score Range
Min: -4.37   Max: -0.96
Current: -2.71

-4.37
-0.96

During the past 13 years, the highest Beneish M-Score of ON Semiconductor Corp was -0.96. The lowest was -4.37. 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 * 1.0331+0.528 * 0.907+0.404 * 0.9427+0.892 * 1.0517+0.115 * 1.059
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9879+4.679 * -0.0535-0.327 * 0.9736
=-2.71

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $467 Mil.
Revenue was 757.6 + 706.5 + 718 + 715.4 = $2,898 Mil.
Gross Profit was 273 + 250.8 + 252.9 + 249.2 = $1,026 Mil.
Total Current Assets was $1,762 Mil.
Total Assets was $3,418 Mil.
Property, Plant and Equipment(Net PPE) was $1,142 Mil.
Depreciation, Depletion and Amortization(DDA) was $219 Mil.
Selling, General & Admin. Expense(SGA) was $338 Mil.
Total Current Liabilities was $869 Mil.
Long-Term Debt was $736 Mil.
Net Income was 88 + 58.4 + 28.7 + 51.8 = $227 Mil.
Non Operating Income was -1.2 + -0.6 + -0.5 + -1.4 = $-4 Mil.
Cash Flow from Operations was 151.6 + 74.9 + 127 + 59.9 = $413 Mil.
Accounts Receivable was $430 Mil.
Revenue was 688.3 + 661 + 680.2 + 725.5 = $2,755 Mil.
Gross Profit was 231.8 + 204.5 + 210.4 + 238 = $885 Mil.
Total Current Assets was $1,622 Mil.
Total Assets was $3,241 Mil.
Property, Plant and Equipment(Net PPE) was $1,102 Mil.
Depreciation, Depletion and Amortization(DDA) was $226 Mil.
Selling, General & Admin. Expense(SGA) was $326 Mil.
Total Current Liabilities was $877 Mil.
Long-Term Debt was $686 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)
=(467 / 2897.5) / (429.8 / 2755)
=0.16117343 / 0.15600726
=1.0331

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)
=(250.8 / 2755) / (273 / 2897.5)
=0.32112523 / 0.35406385
=0.907

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 - (1761.6 + 1141.7) / 3418.4) / (1 - (1621.8 + 1101.5) / 3241.4)
=0.15068453 / 0.15983834
=0.9427

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
=2897.5 / 2755
=1.0517

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))
=(225.8 / (225.8 + 1101.5)) / (218.5 / (218.5 + 1141.7))
=0.17011979 / 0.16063814
=1.059

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)
=(338.2 / 2897.5) / (325.5 / 2755)
=0.11672131 / 0.11814882
=0.9879

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)
=((735.5 + 869.3) / 3418.4) / ((686.3 + 876.6) / 3241.4)
=0.4694594 / 0.4821682
=0.9736

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
=(226.9 - -3.7 - 413.4) / 3418.4
=-0.0535

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 -2.71 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 0.87020.97460.86341.01991.03920.97860.89711.41010.89120.9751
AQI 0.75771.04881.0171.74381.34960.97871.06690.69710.95990.9083
SGI 1.1850.9951.21511.02251.3120.86091.30781.4880.8410.9612
DEPI 1.14131.00751.4690.93390.87460.86141.11650.94460.94731.0981
SGAI 0.96331.05940.95020.97581.1041.01960.93460.94531.04790.9739
LVGI 0.95160.92310.92130.84770.72070.81790.8991.08480.92940.9595
TATA 0.0016-0.0779-0.0543-0.0457-0.3322-0.0862-0.0869-0.1355-0.1095-0.0542
M-score -2.61-2.62-2.60-2.35-3.70-2.43-2.71-2.48-3.26-2.70

ON Semiconductor Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.56610.71570.84070.93591.06441.11921.17551.10131.16011.0331
GMI 1.20771.05530.94150.89120.94130.99071.00740.97510.93090.907
AQI 0.94180.96350.95180.95990.97140.98060.95510.90830.88350.9427
SGI 1.25911.06720.91670.8410.84780.87320.92030.96121.00591.0517
DEPI 0.84990.87430.94790.94730.96910.98181.00111.09811.07031.059
SGAI 0.98621.01051.01281.04791.02781.02691.02180.97390.99170.9879
LVGI 0.94830.94060.92060.92940.92410.92770.93570.95950.97730.9736
TATA -0.1199-0.1095-0.0656-0.1095-0.1176-0.104-0.1096-0.0542-0.0402-0.0535
M-score -3.12-3.18-3.04-3.26-3.13-2.97-2.90-2.70-2.58-2.71
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