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Sirona Dental Systems Inc (NAS:SIRO)
Beneish M-Score
-2.09 (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.

Sirona Dental Systems Inc has a M-score of -2.09 signals that the company is a manipulator.

SIRO' s 10-Year Beneish M-Score Range
Min: -3.29   Max: 30
Current: -2.09

-3.29
30

During the past 8 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.


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 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 * 0.9763+4.679 * -0.0171-0.327 * 1.0406
=-2.09

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

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

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)
=(174.2 / 1159.717) / (109.959 / 1070.268)
=0.15020906 / 0.10273969
=1.462

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)
=(151.5 / 1070.268) / (167.6 / 1159.717)
=0.54206049 / 0.53899874
=1.0057

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 - (663.6 + 230.3) / 1869.7) / (1 - (481.548 + 152.783) / 1609.553)
=0.52190191 / 0.60589617
=0.8614

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
=1159.717 / 1070.268
=1.0836

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))
=0.32967862 / 0.24958292
=1.3209

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) / (327.065 / 1070.268)
=0.29835382 / 0.30559168
=0.9763

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)
=0.17222014 / 0.16549502
=1.0406

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
=(169.116 - -1.252 - 202.425) / 1869.7
=-0.0171

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.


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.

Sirona Dental Systems Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.78340.99451.23250.9734
GMI 0.93680.97880.98920.9965
AQI 0.92910.90591.07320.906
SGI 1.07991.18641.07171.1247
DEPI 1.05621.16651.08771.2017
SGAI 0.96950.98990.99571.001
LVGI 0.88860.93570.56371.0567
TATA -0.0626-0.0345-0.0427-0.0423
M-score -2.91-2.49-2.22-2.63

Sirona Dental Systems Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.84670.88591.23251.12181.01590.8110.97340.97191.0711.462
GMI 1.01121.00420.98920.97220.97060.97520.99661.01221.01621.0057
AQI 1.11291.09531.07320.9580.91990.91830.9060.87750.87750.8614
SGI 1.16891.08291.07171.06121.07931.12571.12471.1351.11091.0836
DEPI 1.06511.021.08771.14281.10381.15031.20171.31941.35681.3209
SGAI 0.99211.02940.99571.00941.02320.99031.00080.95870.95090.9763
LVGI 0.50740.53330.56370.91541.09441.03481.05670.98340.95591.0406
TATA -0.0451-0.0515-0.0427-0.0514-0.0519-0.0518-0.0423-0.026-0.0311-0.0171
M-score -2.46-2.56-2.22-2.54-2.71-2.82-2.63-2.50-2.44-2.09
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