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Sirona Dental Systems, Inc. (NAS:SIRO)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

SIRO' s 10-Year Beneish M-Score Range
Min: -3.29   Max: 30
Current: -2.5

-3.29
30

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.


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 * 0.9719+0.528 * 1.0122+0.404 * 0.8775+0.892 * 1.135+0.115 * 1.3194
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.959+4.679 * -0.026-0.327 * 0.9834
=-2.50

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $163 Mil.
Revenue was 298.726 + 278.604 + 283.157 + 267.326 = $1,128 Mil.
Gross Profit was 162.731 + 143.291 + 151.487 + 144.706 = $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.
Net Income was 44.171 + 36.235 + 40.55 + 31.658 = $153 Mil.
Non Operating Income was -2.501 + 0.117 + -3.971 + -4.323 = $-11 Mil.
Cash Flow from Operations was 11.285 + 72.005 + 70.366 + 55.965 = $210 Mil.
Accounts Receivable was $148 Mil.
Revenue was 272.404 + 247.364 + 242.007 + 231.864 = $994 Mil.
Gross Profit was 151.871 + 132.079 + 128.44 + 124.649 = $537 Mil.
Total Current Assets was $416 Mil.
Total Assets was $1,568 Mil.
Property, Plant and Equipment(Net PPE) was $147 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $308 Mil.
Total Current Liabilities was $193 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)
=(163.112 / 1127.813) / (147.86 / 993.639)
=0.14462681 / 0.14880656
=0.9719

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)
=(143.291 / 993.639) / (162.731 / 1127.813)
=0.54047697 / 0.53396707
=1.0122

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 - (560.098 + 219.709) / 1780.428) / (1 - (416.338 + 147.4) / 1567.826)
=0.56201149 / 0.64043331
=0.8775

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
=1127.813 / 993.639
=1.135

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))
=(76.406 / (76.406 + 147.4)) / (76.694 / (76.694 + 219.709))
=0.34139389 / 0.25874907
=1.3194

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)
=(335.123 / 1127.813) / (307.866 / 993.639)
=0.29714412 / 0.30983687
=0.959

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)
=((75 + 224.548) / 1780.428) / ((75 + 193.24) / 1567.826)
=0.16824494 / 0.17109041
=0.9834

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
=(152.614 - -10.678 - 209.621) / 1780.428
=-0.026

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.


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

Mar05Mar06Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.06741.14311.0281.08420.89081.1690.78340.99451.23250.9734
GMI 0.98831.02591.50311.00721.01060.94070.93680.97880.98920.9965
AQI 0.09831.279744.46360.95080.93780.96120.92910.90591.07320.906
SGI 1.33061.33877.41881.26771.14720.94211.07991.18641.07171.1247
DEPI 1.29241.2040.56210.97231.05931.09141.05621.16651.08771.2017
SGAI 0.83820.89931.20951.06621.03980.98390.96950.98990.99571.001
LVGI 0.79780.813.57481.01640.97390.90360.88860.93570.56371.0567
TATA -0.1282-0.0519-0.0691-0.0114-0.0465-0.04-0.0626-0.0345-0.0427-0.0423
M-score -2.97-2.0619.84-2.25-2.68-2.57-2.91-2.49-2.22-2.63

Sirona Dental Systems, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.99450.9590.84670.88591.23251.12181.01590.8110.97340.9719
GMI 0.97881.00331.01121.00420.98920.97220.97060.97520.99651.0122
AQI 0.90591.06521.11291.09531.07320.9580.91990.91830.9060.8775
SGI 1.18641.18361.16891.08291.07171.06121.07931.12571.12471.135
DEPI 1.16651.11471.06511.021.08771.14281.10421.151.20171.3194
SGAI 0.98991.01430.99211.02940.99571.00941.02160.98851.00120.959
LVGI 0.93570.59010.50740.53330.56370.91541.09441.03481.05670.9834
TATA -0.0345-0.037-0.0451-0.0515-0.0427-0.0514-0.0518-0.0518-0.0423-0.026
M-score -2.49-2.35-2.46-2.56-2.22-2.54-2.71-2.82-2.63-2.50
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