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Qualcomm Inc (NAS:QCOM)
Beneish M-Score
-2.08 (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 -2.08 signals that the company is a manipulator.

QCOM' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 1.06
Current: -2.08

-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 -2.57.


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 * 1.5938+0.528 * 1.0084+0.404 * 0.9561+0.892 * 1.0587+0.115 * 0.921
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8259+4.679 * -0.0335-0.327 * 1.1517
=-2.08

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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 $2,233 Mil.
Total Current Liabilities was $6,405 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1972 + 1894 + 2238 + 1959 = $8,063 Mil.
Non Operating Income was 101 + 716 + 283 + 118 = $1,218 Mil.
Cash Flow from Operations was 2364 + 1619 + 2673 + 1814 = $8,470 Mil.
Accounts Receivable was $1,327 Mil.
Revenue was 6622 + 6481 + 6243 + 6124 = $25,470 Mil.
Gross Profit was 3916 + 3767 + 3746 + 3752 = $15,181 Mil.
Total Current Assets was $20,585 Mil.
Total Assets was $46,282 Mil.
Property, Plant and Equipment(Net PPE) was $2,562 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,048 Mil.
Selling, General & Admin. Expense(SGA) was $2,554 Mil.
Total Current Liabilities was $5,313 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)
=(2239 / 26964) / (1327 / 25470)
=0.08303664 / 0.05210051
=1.5938

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)
=(3935 / 25470) / (4052 / 26964)
=0.59603455 / 0.59108441
=1.0084

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 - (22761 + 2531) / 48447) / (1 - (20585 + 2562) / 46282)
=0.47794497 / 0.49987036
=0.9561

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
=26964 / 25470
=1.0587

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))
=(1048 / (1048 + 2562)) / (1165 / (1165 + 2531))
=0.29030471 / 0.31520563
=0.921

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)
=(2233 / 26964) / (2554 / 25470)
=0.08281412 / 0.10027483
=0.8259

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 + 6405) / 48447) / ((0 + 5313) / 46282)
=0.13220633 / 0.11479625
=1.1517

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
=(8063 - 1218 - 8470) / 48447
=-0.0335

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 -2.08 signals that the company is likely to 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 0.80540.96990.86664.49640.18540.98910.99881.14931.12891.0571
GMI 0.98010.99991.01761.0060.99850.99311.03781.07161.03931.0143
AQI 1.08931.49450.97121.01951.04671.15491.031.0530.88520.9659
SGI 1.16251.32661.17871.2560.93481.05431.3621.27841.30051.0652
DEPI 1.18851.05540.8791.01280.82890.95880.71781.27580.94410.8017
SGAI 0.99231.33321.12360.92490.96940.91620.95020.91290.8530.8538
LVGI 1.03781.09051.30570.7641.09891.7450.81190.84890.92911.0808
TATA -0.0571-0.055-0.0381-0.001-0.1799-0.0362-0.0251-0.0058-0.0635-0.0442
M-score -2.75-2.35-2.761.06-4.16-2.79-2.21-1.97-2.37-2.61

Qualcomm Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.14951.26721.27491.23151.12890.64710.98760.94631.05711.5938
GMI 1.07181.04371.02251.02771.03921.05611.04521.03411.01421.0084
AQI 1.0530.99461.12091.090.88520.90150.89920.81270.96590.9561
SGI 1.27821.25571.24611.26611.30051.24511.18831.12991.06521.0587
DEPI 1.27581.18870.95460.92820.94410.84210.82570.82320.80170.921
SGAI 0.91260.9190.92220.90390.85330.87180.8460.85410.85340.8259
LVGI 0.84890.84050.88680.82650.92911.02851.11481.15921.08081.1517
TATA -0.00580.001-0.0132-0.0301-0.0635-0.0812-0.0688-0.0715-0.0442-0.0335
M-score -1.97-1.89-1.96-2.05-2.37-2.98-2.69-2.85-2.61-2.08
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