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SanDisk Corp (NAS:SNDK)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

SNDK' s 10-Year Beneish M-Score Range
Min: -10.19   Max: 25.25
Current: -2.73

-10.19
25.25

During the past 13 years, the highest Beneish M-Score of SanDisk Corp was 25.25. The lowest was -10.19. And the median was -2.16.


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 * 1.1485+0.528 * 0.9078+0.404 * 1.0939+0.892 * 1.1064+0.115 * 0.9116
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1626+4.679 * -0.0644-0.327 * 1.4127
=-2.73

* 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 $871 Mil.
Revenue was 1746.491 + 1634.011 + 1511.945 + 1727.858 = $6,620 Mil.
Gross Profit was 817.138 + 759.65 + 751.29 + 857.155 = $3,185 Mil.
Total Current Assets was $4,354 Mil.
Total Assets was $10,708 Mil.
Property, Plant and Equipment(Net PPE) was $692 Mil.
Depreciation, Depletion and Amortization(DDA) was $545 Mil.
Selling, General & Admin. Expense(SGA) was $567 Mil.
Total Current Liabilities was $2,215 Mil.
Long-Term Debt was $1,188 Mil.
Net Income was 262.661 + 273.946 + 268.948 + 337.78 = $1,143 Mil.
Non Operating Income was 0.825 + -1.179 + 0 + 6.209 = $6 Mil.
Cash Flow from Operations was 587.696 + 240.86 + 382.079 + 616.815 = $1,827 Mil.
Accounts Receivable was $685 Mil.
Revenue was 1625.153 + 1476.263 + 1340.729 + 1541.503 = $5,984 Mil.
Gross Profit was 801.993 + 676.819 + 531.516 + 603.012 = $2,613 Mil.
Total Current Assets was $3,948 Mil.
Total Assets was $8,945 Mil.
Property, Plant and Equipment(Net PPE) was $673 Mil.
Depreciation, Depletion and Amortization(DDA) was $452 Mil.
Selling, General & Admin. Expense(SGA) was $441 Mil.
Total Current Liabilities was $1,193 Mil.
Long-Term Debt was $820 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)
=(870.552 / 6620.305) / (685.103 / 5983.648)
=0.13149726 / 0.11449587
=1.1485

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)
=(759.65 / 5983.648) / (817.138 / 6620.305)
=0.43674695 / 0.48113085
=0.9078

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 - (4354.134 + 692.362) / 10708.261) / (1 - (3947.905 + 673.219) / 8944.531)
=0.52872871 / 0.4833576
=1.0939

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
=6620.305 / 5983.648
=1.1064

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))
=(451.569 / (451.569 + 673.219)) / (544.885 / (544.885 + 692.362))
=0.40147032 / 0.44040115
=0.9116

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)
=(567.065 / 6620.305) / (440.85 / 5983.648)
=0.08565542 / 0.07367579
=1.1626

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)
=((1188.356 + 2214.946) / 10708.261) / ((819.681 + 1192.646) / 8944.531)
=0.31782023 / 0.22497848
=1.4127

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
=(1143.335 - 5.855 - 1827.45) / 10708.261
=-0.0644

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 -2.73 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.64161.30331.31620.63270.30661.80391.15941.20941.34460.8932
GMI 1.05270.91481.10861.232716.39780.05230.76851.08791.29310.7168
AQI 1.00660.84653.23461.40480.97970.9761.0991.05460.9111.0081
SGI 1.64571.29771.41261.19610.86011.06431.35331.17310.89231.2212
DEPI 1.33350.8790.79470.79330.86461.00460.94420.90981.31250.9286
SGAI 0.88691.09171.27721.09581.30120.66990.7320.80921.17481.0248
LVGI 0.62561.20161.66330.9711.26420.80511.01150.87140.97441.1866
TATA 0.021-0.0285-0.0259-0.0612-0.343-0.0118-0.0209-0.0087-0.0101-0.0786
M-score -1.92-2.27-1.27-2.673.12-2.13-2.16-2.04-2.17-2.97

SanDisk Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.74731.0661.34461.30232.09641.25110.89321.11071.29571.1485
GMI 1.20771.27011.29311.19260.96730.78390.71680.7120.79880.9078
AQI 0.96240.92110.9110.85770.89760.92561.00811.09541.05361.0939
SGI 1.00010.940.89230.93081.07661.1761.22121.22241.1541.1064
DEPI 1.05691.1051.31251.16461.13881.05690.92860.92780.91140.9116
SGAI 0.95961.06331.17481.19811.08441.02231.02481.00961.07291.1626
LVGI 0.87730.93850.97441.01880.77390.86731.18661.11671.46521.4127
TATA 0.0160.005-0.0101-0.0453-0.062-0.0723-0.0788-0.0597-0.0436-0.0644
M-score -2.49-2.32-2.17-2.45-1.68-2.53-2.97-2.62-2.53-2.73
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