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Qualcomm Inc (NAS:QCOM)
Beneish M-Score
-3.54 (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 -3.47 suggests that the company is not a manipulator.

QCOM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.16   Max: 1.06
Current: -3.54

-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 -2.59.


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 * 0.6651+0.528 * 1.0049+0.404 * 1.1416+0.892 * 0.8885+0.115 * 0.9217
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1786+4.679 * -0.0258-0.327 * 2.4776
=-3.47

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,323 Mil.
Revenue was 5775 + 5456 + 5832 + 6894 = $23,957 Mil.
Gross Profit was 3241 + 3204 + 3381 + 4266 = $14,092 Mil.
Total Current Assets was $20,338 Mil.
Total Assets was $50,229 Mil.
Property, Plant and Equipment(Net PPE) was $2,484 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,291 Mil.
Selling, General & Admin. Expense(SGA) was $2,355 Mil.
Total Current Liabilities was $6,503 Mil.
Long-Term Debt was $9,950 Mil.
Net Income was 1498 + 1062 + 1184 + 1053 = $4,797 Mil.
Non Operating Income was 99 + 54 + 67 + -6 = $214 Mil.
Cash Flow from Operations was 2739 + 1684 + 2116 + -658 = $5,881 Mil.
Accounts Receivable was $2,239 Mil.
Revenue was 7099 + 6692 + 6806 + 6367 = $26,964 Mil.
Gross Profit was 4052 + 3935 + 4066 + 3885 = $15,938 Mil.
Total Current Assets was $22,761 Mil.
Total Assets was $48,447 Mil.
Property, Plant and Equipment(Net PPE) was $2,531 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,165 Mil.
Selling, General & Admin. Expense(SGA) was $2,249 Mil.
Total Current Liabilities was $6,405 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)
=(1323 / 23957) / (2239 / 26964)
=0.05522394 / 0.08303664
=0.6651

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)
=(3204 / 26964) / (3241 / 23957)
=0.59108441 / 0.58822056
=1.0049

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 - (20338 + 2484) / 50229) / (1 - (22761 + 2531) / 48447)
=0.54564096 / 0.47794497
=1.1416

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
=23957 / 26964
=0.8885

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))
=(1165 / (1165 + 2531)) / (1291 / (1291 + 2484))
=0.31520563 / 0.34198675
=0.9217

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)
=(2355 / 23957) / (2249 / 26964)
=0.09830112 / 0.08340751
=1.1786

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)
=((9950 + 6503) / 50229) / ((0 + 6405) / 48447)
=0.32755978 / 0.13220633
=2.4776

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
=(4797 - 214 - 5881) / 50229
=-0.0258

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 -3.47 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 0.96990.86664.49640.18540.98910.99881.14931.12891.05710.8531
GMI 0.99991.01761.0060.99850.99311.03781.07161.03931.01431.012
AQI 1.49450.97121.01951.04671.15491.031.0530.88520.96591.0568
SGI 1.32661.17871.2560.93481.05431.3621.27841.30051.06520.9545
DEPI 1.05540.8791.01280.82890.95880.71781.27580.94410.80170.9762
SGAI 1.33321.12360.92490.96940.91620.95020.91290.8530.85381.0724
LVGI 1.09051.30570.7641.09891.7450.81190.84890.92911.08082.5555
TATA -0.055-0.0381-0.001-0.1799-0.0362-0.0251-0.0179-0.0487-0.0323-0.0103
M-score -2.35-2.761.06-4.16-2.79-2.21-2.02-2.30-2.55-3.20

Qualcomm Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.12890.64710.98760.94631.05711.59380.86820.93240.85310.6651
GMI 1.03921.05611.04521.03411.01421.00841.00331.00921.0121.0049
AQI 0.88520.90150.89920.81270.96590.95610.99880.94051.05681.1416
SGI 1.30051.24511.18831.12991.06521.05871.06911.00920.95450.8885
DEPI 0.94410.84210.82570.82320.80170.9210.93320.97030.97620.9217
SGAI 0.85330.87180.8460.85410.85340.83180.86730.92861.08021.1786
LVGI 0.92911.02851.11481.15921.08081.15171.0612.45652.55552.4776
TATA -0.0487-0.0666-0.0522-0.0551-0.0298-0.02180.01090.0044-0.0115-0.0258
M-score -2.30-2.91-2.62-2.78-2.54-2.03-2.49-3.00-3.21-3.47
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