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Sirona Dental Systems Inc (NAS:SIRO)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

SIRO' s 10-Year Beneish M-Score Range
Min: -2.96   Max: -1.03
Current: -2.85

-2.96
-1.03

During the past 13 years, the highest Beneish M-Score of Sirona Dental Systems Inc was -1.03. The lowest was -2.96. And the median was -2.46.


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 * 0.7488+0.528 * 0.9798+0.404 * 0.8869+0.892 * 1.0632+0.115 * 1.1502
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9922+4.679 * -0.0375-0.327 * 0.9426
=-2.85

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $116 Mil.
Revenue was 290 + 299.7 + 282.7 + 298.726 = $1,171 Mil.
Gross Profit was 159.9 + 167.6 + 151.5 + 162.731 = $642 Mil.
Total Current Assets was $687 Mil.
Total Assets was $1,811 Mil.
Property, Plant and Equipment(Net PPE) was $142 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $351 Mil.
Total Current Liabilities was $237 Mil.
Long-Term Debt was $78 Mil.
Net Income was 42.7 + 51.5 + 37.3 + 44.171 = $176 Mil.
Non Operating Income was -3.5 + 1.1 + 0.1 + -2.501 = $-5 Mil.
Cash Flow from Operations was 117.9 + 51.6 + 67.615 + 11.285 = $248 Mil.
Accounts Receivable was $145 Mil.
Revenue was 278.6 + 283.2 + 267.3 + 272.404 = $1,102 Mil.
Gross Profit was 143.3 + 151.5 + 144.7 + 151.871 = $591 Mil.
Total Current Assets was $563 Mil.
Total Assets was $1,738 Mil.
Property, Plant and Equipment(Net PPE) was $112 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $333 Mil.
Total Current Liabilities was $246 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)
=(115.6 / 1171.126) / (145.2 / 1101.504)
=0.09870842 / 0.13181977
=0.7488

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)
=(167.6 / 1101.504) / (159.9 / 1171.126)
=0.53687594 / 0.54796068
=0.9798

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 - (687.1 + 141.7) / 1811) / (1 - (563.1 + 112.2) / 1738.4)
=0.54235229 / 0.61153935
=0.8869

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
=1171.126 / 1101.504
=1.0632

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))
=(75.6 / (75.6 + 112.2)) / (76.3 / (76.3 + 141.7))
=0.40255591 / 0.35
=1.1502

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)
=(350.957 / 1171.126) / (332.683 / 1101.504)
=0.29967484 / 0.30202614
=0.9922

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 + 237.3) / 1811) / ((75 + 246.1) / 1738.4)
=0.17410271 / 0.18471008
=0.9426

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
=(175.671 - -4.801 - 248.4) / 1811
=-0.0375

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 -2.85 suggests that the company will not 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

Mar05Mar06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.06881.14311.06840.8041.29870.78160.99431.26420.97380.7488
GMI 0.98831.02591.51391.01060.94070.93680.97880.98920.99640.9798
AQI 0.09831.279742.27660.93780.96120.92910.90591.07320.97030.8869
SGI 1.33061.33879.40451.14720.94211.07991.18641.07171.12471.0632
DEPI 1.29241.2040.53561.08081.09691.05091.16651.08770.87351.1502
SGAI 0.83820.89931.28961.03980.98390.96950.98990.99571.00080.9917
LVGI 0.79780.813.63340.97390.90360.88860.93570.56371.05670.9426
TATA -0.1282-0.0519-0.0114-0.0465-0.0408-0.0571-0.0278-0.0427-0.0422-0.0375
M-score -2.96-2.0621.01-2.76-2.45-2.89-2.46-2.20-2.64-2.85

Sirona Dental Systems Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93151.26421.12641.02670.81610.97380.97791.07611.46990.7488
GMI 1.00420.98920.97220.97060.97520.99651.01221.01621.00560.9798
AQI 1.09531.07320.9580.91990.91830.97030.87750.87750.86140.8869
SGI 1.08291.07171.06121.07931.12571.12471.1351.11091.08361.0632
DEPI 1.021.08771.14281.10381.15030.87351.31941.35671.32091.1502
SGAI 1.02940.99571.00921.0230.99011.00040.95880.95090.97640.9922
LVGI 0.53330.56370.91541.09441.03481.05670.98340.95591.04060.9426
TATA -0.0434-0.0427-0.0514-0.0519-0.0518-0.0422-0.0259-0.031-0.0171-0.0375
M-score -2.48-2.20-2.54-2.70-2.82-2.64-2.49-2.43-2.08-2.85
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