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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.
During the past 13 years, the highest Beneish M-Score of Sirona Dental Systems Inc was 29.97. The lowest was -3.45. And the median was -2.43.
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 * 1.2314||+||0.528 * 0.9795||+||0.404 * 0.8743||+||0.892 * 1.0061||+||0.115 * 1.0331|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9996||+||4.679 * -0.0236||-||0.327 * 1.2117|
* 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 $193 Mil.|
Revenue was 304.2 + 304.9 + 306.1 + 257.3 = $1,173 Mil.
Gross Profit was 174 + 166.9 + 174.6 + 143.8 = $659 Mil.
Total Current Assets was $876 Mil.
Total Assets was $1,873 Mil.
Property, Plant and Equipment(Net PPE) was $203 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $353 Mil.
Total Current Liabilities was $303 Mil.
Long-Term Debt was $0 Mil.
Net Income was 51.3 + 45.4 + 58.8 + 36 = $192 Mil.
Non Operating Income was 1.5 + -5.9 + -2.2 + -2 = $-9 Mil.
Cash Flow from Operations was 9.3 + 107.7 + 58.1 + 69.2 = $244 Mil.
|Accounts Receivable was $156 Mil.
Revenue was 293 + 290 + 299.7 + 282.7 = $1,165 Mil.
Gross Profit was 162.9 + 159.9 + 167.6 + 151.5 = $642 Mil.
Total Current Assets was $708 Mil.
Total Assets was $1,794 Mil.
Property, Plant and Equipment(Net PPE) was $215 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $351 Mil.
Total Current Liabilities was $240 Mil.
Long-Term Debt was $0 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)|
|=||(192.9 / 1172.5)||/||(155.7 / 1165.4)|
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)|
|=||(641.9 / 1165.4)||/||(659.3 / 1172.5)|
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 - (875.8 + 202.7) / 1873.3)||/||(1 - (708.2 + 215.2) / 1793.9)|
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))|
|=||(75.2 / (75.2 + 215.2))||/||(67.8 / (67.8 + 202.7))|
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)|
|=||(352.7 / 1172.5)||/||(350.7 / 1165.4)|
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 + 303.3) / 1873.3)||/||((0 + 239.7) / 1793.9)|
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|
|=||(191.5 - -8.6||-||244.3)||/||1873.3|
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 -2.50 suggests that the company will not 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