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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.
Sirona Dental Systems Inc has a M-score of -2.09 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Sirona Dental Systems Inc was 30.00. The lowest was -3.29. And the median was -2.39.
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 Sirona Dental Systems 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 * 1.462||+||0.528 * 1.0057||+||0.404 * 0.8614||+||0.892 * 1.0836||+||0.115 * 1.3209|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9765||+||4.679 * -0.0171||-||0.327 * 1.0406|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $174 Mil.|
Revenue was 299.7 + 282.7 + 298.726 + 278.591 = $1,160 Mil.
Gross Profit was 167.6 + 151.5 + 162.731 + 143.255 = $625 Mil.
Total Current Assets was $664 Mil.
Total Assets was $1,870 Mil.
Property, Plant and Equipment(Net PPE) was $230 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $346 Mil.
Total Current Liabilities was $244 Mil.
Long-Term Debt was $78 Mil.
Net Income was 51.5 + 37.3 + 44.171 + 36.145 = $169 Mil.
Non Operating Income was 1.1 + 0.1 + -2.501 + 0.049 = $-1 Mil.
Cash Flow from Operations was 51.6 + 67.615 + 11.285 + 71.925 = $202 Mil.
|Accounts Receivable was $110 Mil.
Revenue was 283.2 + 267.3 + 272.404 + 247.364 = $1,070 Mil.
Gross Profit was 151.5 + 144.7 + 151.871 + 132.079 = $580 Mil.
Total Current Assets was $482 Mil.
Total Assets was $1,610 Mil.
Property, Plant and Equipment(Net PPE) was $153 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $327 Mil.
Total Current Liabilities was $191 Mil.
Long-Term Debt was $75 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(174.2 / 1159.717)||/||(109.959 / 1070.268)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(151.5 / 1070.268)||/||(167.6 / 1159.717)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (663.6 + 230.3) / 1869.7)||/||(1 - (481.548 + 152.783) / 1609.553)|
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.
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))|
|=||(75.142 / (75.142 + 152.783))||/||(76.596 / (76.596 + 230.3))|
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)|
|=||(346.006 / 1159.717)||/||(326.995 / 1070.268)|
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)|
|=||((78 + 244) / 1869.7)||/||((75 + 191.373) / 1609.553)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(169.116 - -1.252||-||202.425)||/||1869.7|
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.
Sirona Dental Systems Inc has a M-score of -2.09 signals that the company is likely to be a manipulator.
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
Sirona Dental Systems Inc Annual Data
Sirona Dental Systems Inc Quarterly Data