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Qualcomm Inc (NAS:QCOM)
Beneish M-Score
-2.61 (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.

Qualcomm Inc has a M-score of -2.61 suggests that the company is not a manipulator.

QCOM' s 10-Year Beneish M-Score Range
Min: -4.16   Max: 1.06
Current: -2.61

-4.16
1.06

During the past 13 years, the highest Beneish M-Score of Qualcomm Inc was 1.06. The lowest was -4.16. And the median was -2.55.


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 Qualcomm 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 * 1.0571+0.528 * 1.0142+0.404 * 0.9659+0.892 * 1.0652+0.115 * 0.8017
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8534+4.679 * -0.0442-0.327 * 1.0808
=-2.61

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,412 Mil.
Revenue was 6692 + 6806 + 6367 + 6622 = $26,487 Mil.
Gross Profit was 3935 + 4066 + 3885 + 3916 = $15,802 Mil.
Total Current Assets was $22,413 Mil.
Total Assets was $48,574 Mil.
Property, Plant and Equipment(Net PPE) was $2,487 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,150 Mil.
Selling, General & Admin. Expense(SGA) was $2,289 Mil.
Total Current Liabilities was $6,013 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1894 + 2238 + 1959 + 1875 = $7,966 Mil.
Non Operating Income was 716 + 283 + 118 + 111 = $1,228 Mil.
Cash Flow from Operations was 1619 + 2673 + 1814 + 2781 = $8,887 Mil.
Accounts Receivable was $2,142 Mil.
Revenue was 6481 + 6243 + 6124 + 6018 = $24,866 Mil.
Gross Profit was 3767 + 3746 + 3752 + 3781 = $15,046 Mil.
Total Current Assets was $19,555 Mil.
Total Assets was $45,516 Mil.
Property, Plant and Equipment(Net PPE) was $2,995 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,017 Mil.
Selling, General & Admin. Expense(SGA) was $2,518 Mil.
Total Current Liabilities was $5,213 Mil.
Long-Term Debt was $0 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)
=(2412 / 26487) / (2142 / 24866)
=0.09106354 / 0.08614172
=1.0571

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)
=(4066 / 24866) / (3935 / 26487)
=0.60508325 / 0.59659456
=1.0142

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 - (22413 + 2487) / 48574) / (1 - (19555 + 2995) / 45516)
=0.48738008 / 0.50456982
=0.9659

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
=26487 / 24866
=1.0652

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))
=(1017 / (1017 + 2995)) / (1150 / (1150 + 2487))
=0.25348953 / 0.31619467
=0.8017

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)
=(2289 / 26487) / (2518 / 24866)
=0.08641975 / 0.10126277
=0.8534

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)
=((0 + 6013) / 48574) / ((0 + 5213) / 45516)
=0.12379051 / 0.11453115
=1.0808

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
=(7966 - 1228 - 8887) / 48574
=-0.0442

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.

Qualcomm Inc has a M-score of -2.61 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.

Qualcomm Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.80540.96990.86664.49640.18540.98830.99961.14931.12891.0571
GMI 0.98010.99991.01761.0060.99851.02151.0091.07161.03931.0143
AQI 1.08931.49450.97121.01951.04671.15491.031.0530.88520.9659
SGI 1.16251.32661.17871.2560.93481.05521.36081.27841.30051.0652
DEPI 1.18851.05540.8791.01280.82890.95880.71781.27580.94410.8017
SGAI 0.99231.33321.12360.92490.96941.00010.87040.93470.83320.8538
LVGI 1.03781.09051.30570.7641.09891.7450.81190.84890.92911.0808
TATA -0.0571-0.055-0.0381-0.001-0.1799-0.0362-0.0251-0.0058-0.0487-0.0442
M-score -2.75-2.35-2.761.06-4.16-2.79-2.21-1.97-2.30-2.61

Qualcomm Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.12871.14981.26761.27491.23151.12890.64710.98760.94631.0571
GMI 1.0361.03041.01431.02251.02771.03921.05611.04521.03411.0142
AQI 0.95841.0530.99461.12091.090.88520.90150.89920.81270.9659
SGI 1.33111.27781.25531.24611.26611.30051.24511.18831.12991.0652
DEPI 1.30131.27581.18870.95460.92820.94410.84210.82570.82320.8017
SGAI 0.82990.8960.91520.94280.92350.83350.85220.82760.83590.8534
LVGI 1.02180.84890.84050.88680.82650.92911.02851.11481.15921.0808
TATA -0.0176-0.00580.001-0.0132-0.0301-0.0487-0.0666-0.0547-0.0576-0.0442
M-score -2.09-1.99-1.91-1.97-2.06-2.30-2.91-2.62-2.78-2.61
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