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Qualcomm Inc (NAS:QCOM)
Beneish M-Score
-2.63 (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 -2.63 suggests that the company is not a manipulator.

QCOM' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 1.06
Current: -2.63

-4.24
1.06

During the past 13 years, the highest Beneish M-Score of Qualcomm Inc was 1.06. The lowest was -4.24. And the median was -2.53.


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 * 0.9876+0.528 * 1.0452+0.404 * 0.8992+0.892 * 1.1883+0.115 * 0.8257
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.846+4.679 * -0.0547-0.327 * 1.1148
=-2.63

* 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 $2,217 Mil.
Revenue was 6367 + 6622 + 6481 + 6243 = $25,713 Mil.
Gross Profit was 3885 + 3916 + 3767 + 3746 = $15,314 Mil.
Total Current Assets was $21,008 Mil.
Total Assets was $47,875 Mil.
Property, Plant and Equipment(Net PPE) was $2,573 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,089 Mil.
Selling, General & Admin. Expense(SGA) was $2,432 Mil.
Total Current Liabilities was $5,901 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1959 + 1875 + 1501 + 1580 = $6,915 Mil.
Non Operating Income was 118 + 111 + 67 + 58 = $354 Mil.
Cash Flow from Operations was 1814 + 2781 + 2510 + 2077 = $9,182 Mil.
Accounts Receivable was $1,889 Mil.
Revenue was 6124 + 6018 + 4870 + 4626 = $21,638 Mil.
Gross Profit was 3752 + 3781 + 3029 + 2907 = $13,469 Mil.
Total Current Assets was $17,766 Mil.
Total Assets was $47,599 Mil.
Property, Plant and Equipment(Net PPE) was $2,971 Mil.
Depreciation, Depletion and Amortization(DDA) was $967 Mil.
Selling, General & Admin. Expense(SGA) was $2,419 Mil.
Total Current Liabilities was $5,263 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)
=(2217 / 25713) / (1889 / 21638)
=0.08622098 / 0.08730012
=0.9876

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)
=(3916 / 21638) / (3885 / 25713)
=0.62246973 / 0.59557422
=1.0452

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 - (21008 + 2573) / 47875) / (1 - (17766 + 2971) / 47599)
=0.50744648 / 0.56433959
=0.8992

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
=25713 / 21638
=1.1883

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))
=(967 / (967 + 2971)) / (1089 / (1089 + 2573))
=0.24555612 / 0.29737848
=0.8257

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)
=(2432 / 25713) / (2419 / 21638)
=0.09458251 / 0.11179407
=0.846

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 + 5901) / 47875) / ((0 + 5263) / 47599)
=0.12325849 / 0.11056955
=1.1148

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
=(6915 - 354 - 9182) / 47875
=-0.0547

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 -2.63 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.93470.80540.96990.86664.49640.18540.98910.99881.14931.1289
GMI 0.96330.98010.99991.01761.0060.99850.99311.03781.07161.0393
AQI 1.05691.08931.49450.97121.01951.04671.15491.031.0530.8852
SGI 1.26851.16251.32661.17871.2560.93481.05431.3621.27841.3005
DEPI 0.97731.18851.05540.8791.01280.82890.95880.71781.27580.9441
SGAI 0.89280.99231.33321.12360.92490.96940.91620.95020.91290.853
LVGI 0.78291.03781.09051.30570.7641.09891.7450.81190.84890.9291
TATA -0.0701-0.0571-0.055-0.0381-0.001-0.1799-0.0362-0.0251-0.0058-0.0487
M-score -2.54-2.75-2.35-2.761.06-4.16-2.79-2.21-1.97-2.30

Qualcomm Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.12781.23261.12831.14951.26721.27491.23151.12890.64710.9876
GMI 1.04841.09751.08771.07181.04371.02251.02771.03921.05611.0452
AQI 1.05091.01010.95841.0530.99461.12091.090.88520.90150.8992
SGI 1.39681.34921.33161.27821.25571.24611.26611.30051.24511.1883
DEPI 0.79121.34381.30131.27581.18870.95460.92820.94410.84210.8257
SGAI 0.90610.91240.88110.91260.9190.92220.90390.85330.87180.846
LVGI 1.05390.96171.02180.84890.84050.88680.82650.92911.02851.1148
TATA -0.0629-0.0304-0.0176-0.00580.001-0.0132-0.0301-0.0487-0.0666-0.0547
M-score -2.28-1.97-2.07-1.97-1.89-1.96-2.05-2.30-2.91-2.63
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