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SanDisk Corp (NAS:SNDK)
Beneish M-Score
-3.22 (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 -3.22 suggests that the company is not a manipulator.

SNDK' s Beneish M-Score Range Over the Past 10 Years
Min: -6.71   Max: 12
Current: -3.22

-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 -2.17.


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 * 0.8739+0.528 * 1.1413+0.404 * 0.5724+0.892 * 0.8396+0.115 * 1.0282
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1739+4.679 * -0.0712-0.327 * 1.0691
=-3.22

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $618 Mil.
Revenue was 1543.15 + 1452.285 + 1237.196 + 1332.241 = $5,565 Mil.
Gross Profit was 624.858 + 602.83 + 484.379 + 545.002 = $2,257 Mil.
Total Current Assets was $5,660 Mil.
Total Assets was $9,231 Mil.
Property, Plant and Equipment(Net PPE) was $817 Mil.
Depreciation, Depletion and Amortization(DDA) was $621 Mil.
Selling, General & Admin. Expense(SGA) was $590 Mil.
Total Current Liabilities was $2,003 Mil.
Long-Term Debt was $1,238 Mil.
Net Income was 135.469 + 133.011 + 80.973 + 39.025 = $388 Mil.
Non Operating Income was 0.447 + -1.759 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 433.979 + 274.972 + 28.864 + 308.865 = $1,047 Mil.
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 $4,195 Mil.
Total Assets was $10,274 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 $2,186 Mil.
Long-Term Debt was $1,188 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)
=(618.191 / 5564.872) / (842.476 / 6627.701)
=0.11108809 / 0.12711436
=0.8739

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)
=(602.83 / 6627.701) / (624.858 / 5564.872)
=0.46288268 / 0.40559226
=1.1413

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 - (5659.786 + 817.13) / 9230.761) / (1 - (4195.198 + 724.357) / 10273.825)
=0.29833347 / 0.52115643
=0.5724

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
=5564.872 / 6627.701
=0.8396

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))
=(578.502 / (578.502 + 724.357)) / (621.095 / (621.095 + 817.13))
=0.44402502 / 0.43184829
=1.0282

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)
=(589.601 / 5564.872) / (598.19 / 6627.701)
=0.10595051 / 0.09025603
=1.1739

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)
=((1237.776 + 2003.48) / 9230.761) / ((1188.491 + 2185.956) / 10273.825)
=0.35113638 / 0.32845089
=1.0691

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
=(388.478 - -1.312 - 1046.68) / 9230.761
=-0.0712

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 -3.22 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.31620.63270.30661.80391.15941.20941.34460.89321.14860.8739
GMI 1.10861.232716.39780.05230.76851.08791.29310.71681.0041.1413
AQI 3.23461.40480.97970.9761.0991.05460.9111.00811.05480.5724
SGI 1.41261.19610.86011.06431.35331.17310.89231.22121.07420.8396
DEPI 0.79470.79330.86461.00460.94420.90981.31250.92860.93331.0282
SGAI 1.27721.09581.30120.66990.7320.80921.17481.02481.18831.1739
LVGI 1.66330.9711.26420.80511.01150.87140.97441.18661.07121.0691
TATA -0.0582-0.0612-0.343-0.0118-0.0209-0.0087-0.0101-0.0786-0.0677-0.0714
M-score -1.42-2.673.12-2.13-2.16-2.04-2.17-2.97-2.63-3.22

SanDisk Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.89321.11071.03531.14851.14860.97120.90560.97840.87390.9718
GMI 0.71680.7120.79880.90781.0041.0971.14131.16771.14131.1016
AQI 1.00811.09541.05361.09391.05481.0161.00590.96480.57240.5173
SGI 1.22121.22241.1541.10641.07421.01680.93110.86960.83960.8682
DEPI 0.92860.92780.91140.91160.93330.97881.00051.02551.02821.0057
SGAI 1.02481.00961.07291.16261.18831.24911.29521.20011.17391.0665
LVGI 1.18661.11671.46521.41271.07121.21331.21971.13631.06911.1124
TATA -0.0788-0.0597-0.0437-0.0645-0.0679-0.0903-0.0913-0.0716-0.0712-0.0682
M-score -2.97-2.62-2.77-2.73-2.63-2.97-3.10-2.95-3.22-3.13
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