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SanDisk Corp (NAS:SNDK)
Beneish M-Score
-2.63 (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.

SanDisk Corp has a M-score of -2.63 suggests that the company is not a manipulator.

SNDK' s 10-Year Beneish M-Score Range
Min: -6.71   Max: 12
Current: -2.63

-6.71
12

During the past 13 years, the highest Beneish M-Score of SanDisk Corp was 12.00. The lowest was -6.71. And the median was -2.15.


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 SanDisk Corp 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 * 1.1486+0.528 * 1.004+0.404 * 1.0554+0.892 * 1.0742+0.115 * 0.9333
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1883+4.679 * -0.0677-0.327 * 1.0747
=-2.63

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $842 Mil.
Revenue was 1735.254 + 1746.491 + 1634.011 + 1511.945 = $6,628 Mil.
Gross Profit was 739.77 + 817.138 + 759.65 + 751.29 = $3,068 Mil.
Total Current Assets was $4,200 Mil.
Total Assets was $10,290 Mil.
Property, Plant and Equipment(Net PPE) was $724 Mil.
Depreciation, Depletion and Amortization(DDA) was $579 Mil.
Selling, General & Admin. Expense(SGA) was $598 Mil.
Total Current Liabilities was $2,191 Mil.
Long-Term Debt was $1,200 Mil.
Net Income was 201.891 + 262.661 + 273.946 + 268.948 = $1,007 Mil.
Non Operating Income was 6.152 + 0.825 + -1.179 + 0 = $6 Mil.
Cash Flow from Operations was 487.813 + 587.696 + 240.86 + 382.079 = $1,698 Mil.
Accounts Receivable was $683 Mil.
Revenue was 1727.858 + 1625.153 + 1476.263 + 1340.729 = $6,170 Mil.
Gross Profit was 857.155 + 801.993 + 676.819 + 531.516 = $2,867 Mil.
Total Current Assets was $4,651 Mil.
Total Assets was $10,489 Mil.
Property, Plant and Equipment(Net PPE) was $656 Mil.
Depreciation, Depletion and Amortization(DDA) was $464 Mil.
Selling, General & Admin. Expense(SGA) was $469 Mil.
Total Current Liabilities was $1,231 Mil.
Long-Term Debt was $1,985 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)
=(842.476 / 6627.701) / (682.809 / 6170.003)
=0.12711436 / 0.11066591
=1.1486

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)
=(817.138 / 6170.003) / (739.77 / 6627.701)
=0.4647458 / 0.46288268
=1.004

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 - (4200.125 + 724.357) / 10289.957) / (1 - (4650.718 + 655.794) / 10488.717)
=0.52142832 / 0.49407425
=1.0554

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
=6627.701 / 6170.003
=1.0742

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))
=(464.065 / (464.065 + 655.794)) / (578.502 / (578.502 + 724.357))
=0.41439592 / 0.44402502
=0.9333

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)
=(598.19 / 6627.701) / (468.622 / 6170.003)
=0.09025603 / 0.07595166
=1.1883

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)
=((1199.696 + 2190.883) / 10289.957) / ((1985.363 + 1230.58) / 10488.717)
=0.32950371 / 0.30660976
=1.0747

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
=(1007.446 - 5.798 - 1698.448) / 10289.957
=-0.0677

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.

SanDisk Corp has a M-score of -2.63 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.

SanDisk Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.30331.31620.63270.30661.80391.15941.20941.34460.89321.1486
GMI 0.91481.10861.232716.39780.05230.76851.08791.29310.71681.004
AQI 0.84653.23461.40480.97970.9761.0991.05460.9111.00811.0554
SGI 1.29771.41261.19610.86011.06431.35331.17310.89231.22121.0742
DEPI 0.8790.79470.79330.86461.00460.94420.90981.31250.92860.9333
SGAI 1.09171.27721.09581.30120.66990.7320.80921.17481.02481.1883
LVGI 1.20161.66330.9711.26420.80511.01150.87140.97441.18661.0747
TATA -0.0285-0.0259-0.0612-0.343-0.0118-0.0209-0.0087-0.0101-0.0786-0.0676
M-score -2.27-1.27-2.673.12-2.13-2.16-2.04-2.17-2.97-2.63

SanDisk Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.0661.34461.30232.09641.25110.89321.11071.29571.14851.1486
GMI 1.27011.29311.19260.96730.78390.71680.7120.79880.90781.004
AQI 0.92110.9110.85770.89760.92561.00811.09541.05361.09391.0554
SGI 0.940.89230.93081.07661.1761.22121.22241.1541.10641.0742
DEPI 1.1051.31251.16461.13881.05690.92860.92780.91140.91160.9333
SGAI 1.06331.17481.19811.08441.02231.02481.00961.07291.16261.1883
LVGI 0.93850.97441.01880.77390.86731.18661.11671.46521.41271.0747
TATA 0.005-0.0101-0.0453-0.062-0.0723-0.0788-0.0597-0.0436-0.0644-0.0677
M-score -2.32-2.17-2.45-1.68-2.53-2.97-2.62-2.53-2.73-2.63
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