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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 -3.29. 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 * 0.9325||+||0.528 * 0.9694||+||0.404 * 0.8634||+||0.892 * 1.0333||+||0.115 * 0.9992|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0134||+||4.679 * -0.0337||-||0.327 * 0.7942|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|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.
Net Income was 46 + 42.7 + 51.5 + 37.3 = $178 Mil.
Non Operating Income was -1.1 + -3.5 + 1.1 + 0.1 = $-3 Mil.
Cash Flow from Operations was 4.2 + 117.9 + 51.6 + 67.6 = $241 Mil.
|Accounts Receivable was $162 Mil.
Revenue was 298.7 + 278.6 + 283.2 + 267.3 = $1,128 Mil.
Gross Profit was 162.7 + 143.3 + 151.5 + 144.7 = $602 Mil.
Total Current Assets was $560 Mil.
Total Assets was $1,780 Mil.
Property, Plant and Equipment(Net PPE) was $220 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $335 Mil.
Total Current Liabilities was $225 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)|
|=||(155.7 / 1165.4)||/||(161.577 / 1127.8)|
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)|
|=||(159.9 / 1127.8)||/||(162.9 / 1165.4)|
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 - (708.2 + 215.2) / 1793.9)||/||(1 - (560.098 + 219.709) / 1780.428)|
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))|
|=||(76.688 / (76.688 + 219.709))||/||(75.2 / (75.2 + 215.2))|
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)|
|=||(350.7 / 1165.4)||/||(334.9 / 1127.8)|
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 + 239.7) / 1793.9)||/||((75 + 224.548) / 1780.428)|
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|
|=||(177.5 - -3.4||-||241.3)||/||1793.9|
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 -2.68 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