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Sirona Dental Systems Inc (NAS:SIRO)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

SIRO' s 10-Year Beneish M-Score Range
Min: -3.29   Max: 29.97
Current: -2.81

-3.29
29.97

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.


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 * 0.9005+0.528 * 0.9576+0.404 * 0.8389+0.892 * 0.9972+0.115 * 0.9132
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0266+4.679 * -0.0357-0.327 * 0.9048
=-2.81

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $136 Mil.
Revenue was 257.3 + 293 + 290 + 299.7 = $1,140 Mil.
Gross Profit was 143.8 + 162.9 + 159.9 + 167.6 = $634 Mil.
Total Current Assets was $734 Mil.
Total Assets was $1,712 Mil.
Property, Plant and Equipment(Net PPE) was $194 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $346 Mil.
Total Current Liabilities was $256 Mil.
Long-Term Debt was $0 Mil.
Net Income was 36 + 46 + 42.7 + 51.5 = $176 Mil.
Non Operating Income was -2 + -1.1 + -3.5 + 1.1 = $-6 Mil.
Cash Flow from Operations was 69.2 + 4.2 + 117.9 + 51.6 = $243 Mil.
Accounts Receivable was $151 Mil.
Revenue was 282.7 + 298.7 + 278.6 + 283.2 = $1,143 Mil.
Gross Profit was 151.5 + 162.7 + 143.3 + 151.5 = $609 Mil.
Total Current Assets was $598 Mil.
Total Assets was $1,821 Mil.
Property, Plant and Equipment(Net PPE) was $229 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $338 Mil.
Total Current Liabilities was $225 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)
=(135.6 / 1140) / (151 / 1143.2)
=0.11894737 / 0.13208537
=0.9005

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)
=(162.9 / 1143.2) / (143.8 / 1140)
=0.53271519 / 0.55631579
=0.9576

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 - (733.7 + 194.1) / 1711.9) / (1 - (598 + 228.8) / 1821)
=0.45802909 / 0.54596376
=0.8389

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
=1140 / 1143.2
=0.9972

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))
=(76.8 / (76.8 + 228.8)) / (73.7 / (73.7 + 194.1))
=0.2513089 / 0.27520538
=0.9132

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)
=(345.6 / 1140) / (337.6 / 1143.2)
=0.30315789 / 0.29531141
=1.0266

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 + 255.7) / 1711.9) / ((75.3 + 225.3) / 1821)
=0.1493662 / 0.16507414
=0.9048

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
=(176.2 - -5.5 - 242.9) / 1711.9
=-0.0357

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 -2.81 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 1.29241.2040.54651.05931.09141.05621.16651.08770.87351.1502
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 -0.1282-0.0519-0.0114-0.0465-0.04-0.0626-0.0345-0.0427-0.0422-0.0375
M-score -2.96-2.0621.01-2.76-2.45-2.92-2.49-2.20-2.64-2.85

Sirona Dental Systems Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.12641.02670.81610.97380.97791.07611.46990.74880.93250.9005
GMI 0.97220.97060.97520.99651.01221.01621.00560.97980.96940.9576
AQI 0.9580.91990.91830.97030.87750.87750.86140.88690.86340.8389
SGI 1.06121.07931.12571.12471.1351.11091.08361.06321.03330.9972
DEPI 1.14281.10381.15030.87351.31951.35671.32091.15020.99920.9132
SGAI 1.00941.02320.99031.00070.95840.95060.9760.99191.01341.0266
LVGI 0.91541.09441.03481.05670.98340.95590.78860.94260.79420.9048
TATA -0.0514-0.0519-0.0518-0.0422-0.0259-0.031-0.0171-0.0375-0.0337-0.0357
M-score -2.54-2.70-2.82-2.64-2.49-2.43-2.00-2.85-2.68-2.81
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