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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 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 * 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

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

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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