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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 -3.07 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of SanDisk Corp was 12.00. The lowest was -6.27. And the median was -2.04.
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 * 0.7799||+||0.528 * 0.7168||+||0.404 * 1.0081||+||0.892 * 1.2212||+||0.115 * 0.9286|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0248||+||4.679 * -0.0786||-||0.327 * 1.1866|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $792 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.
Net Income was 337.78 + 276.859 + 261.789 + 166.229 = $1,043 Mil.
Non Operating Income was 6.231 + -2.058 + 0.848 + -1.802 = $3 Mil.
Cash Flow from Operations was 616.815 + 382.413 + 390.793 + 473.651 = $1,864 Mil.
|Accounts Receivable was $831 Mil.
Revenue was 1541.503 + 1273.19 + 1032.255 + 1205.561 = $5,053 Mil.
Gross Profit was 603.012 + 382.921 + 280.777 + 416.51 = $1,683 Mil.
Total Current Assets was $4,606 Mil.
Total Assets was $10,339 Mil.
Property, Plant and Equipment(Net PPE) was $666 Mil.
Depreciation, Depletion and Amortization(DDA) was $416 Mil.
Selling, General & Admin. Expense(SGA) was $374 Mil.
Total Current Liabilities was $1,882 Mil.
Long-Term Debt was $790 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(791.714 / 6170.003)||/||(831.312 / 5052.509)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(801.993 / 5052.509)||/||(857.155 / 6170.003)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (4650.718 + 655.794) / 10488.717)||/||(1 - (4606.36 + 665.542) / 10339.127)|
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.
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))|
|=||(416.301 / (416.301 + 665.542))||/||(464.065 / (464.065 + 655.794))|
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)|
|=||(468.622 / 6170.003)||/||(374.455 / 5052.509)|
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)|
|=||((1985.363 + 1230.58) / 10488.717)||/||((789.913 + 1881.667) / 10339.127)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1042.657 - 3.219||-||1863.672)||/||10488.717|
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 -3.07 suggests that the company will not be a manipulator.
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
SanDisk Corp Annual Data
SanDisk Corp Quarterly Data