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SanDisk Corp (NAS:SNDK)
Beneish M-Score
-3.07 (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 -3.07 suggests that the company is not a manipulator.

SNDK' s 10-Year Beneish M-Score Range
Min: -6.27   Max: 12
Current: -3.07

-6.27
12

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.


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 * 0.7799+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
=-3.07

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

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

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)
=(791.714 / 6170.003) / (831.312 / 5052.509)
=0.12831663 / 0.16453449
=0.7799

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)
=(801.993 / 5052.509) / (857.155 / 6170.003)
=0.33314537 / 0.4647458
=0.7168

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 - (4650.718 + 655.794) / 10488.717) / (1 - (4606.36 + 665.542) / 10339.127)
=0.49407425 / 0.49010182
=1.0081

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
=6170.003 / 5052.509
=1.2212

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))
=0.38480722 / 0.41439592
=0.9286

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)
=0.07595166 / 0.07411268
=1.0248

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)
=0.30660976 / 0.25839512
=1.1866

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
=(1042.657 - 3.219 - 1863.672) / 10488.717
=-0.0786

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.


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 0.64161.30331.52520.71610.23381.80391.15941.20941.78550.7799
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 -1.92-2.27-1.08-2.603.05-2.13-2.16-2.04-1.77-3.07

SanDisk Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.19771.20941.36990.74731.0661.78551.93362.75791.66270.7799
GMI 1.1091.08791.11161.20771.27011.29311.19260.96730.78390.7168
AQI 1.16821.05461.03570.96240.92110.9110.85770.89760.92561.0081
SGI 1.14171.17311.10711.00010.940.89230.93081.07661.1761.2212
DEPI 1.01680.90981.00611.05691.1051.31251.16461.13881.05690.9286
SGAI 0.83870.80920.8650.95961.06331.17481.19811.08441.02231.0248
LVGI 0.86630.87140.87950.87730.93850.97441.01880.77390.86731.1866
TATA -0.0045-0.00870.01440.0160.005-0.0101-0.0452-0.0618-0.0721-0.0786
M-score -1.99-2.04-1.84-2.49-2.32-1.77-1.87-1.07-2.15-3.07
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