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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.
Spectranetics Corp has a M-score of -2.57 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Spectranetics Corp was 1.15. The lowest was -3.93. And the median was -2.26.
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 Spectranetics 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 * 1.1056||+||0.528 * 0.981||+||0.404 * 0.4286||+||0.892 * 1.111||+||0.115 * 1.0242|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.032||+||4.679 * -0.0346||-||0.327 * 0.6472|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $27.7 Mil.|
Revenue was 39.614 + 41.92 + 39.763 + 39.453 = $160.8 Mil.
Gross Profit was 29.28 + 31.561 + 29.71 + 28.828 = $119.4 Mil.
Total Current Assets was $162.3 Mil.
Total Assets was $212.0 Mil.
Property, Plant and Equipment(Net PPE) was $28.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $96.8 Mil.
Total Current Liabilities was $19.8 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -5.661 + 0.883 + 0.434 + -0.728 = $-5.1 Mil.
Non Operating Income was 0.003 + -0.005 + 0.035 + 0.008 = $0.0 Mil.
Cash Flow from Operations was -8.359 + 5.029 + 3.513 + 2.048 = $2.2 Mil.
|Accounts Receivable was $22.5 Mil.
Revenue was 37.675 + 36.751 + 35.23 + 35.035 = $144.7 Mil.
Gross Profit was 27.356 + 26.936 + 25.606 + 25.515 = $105.4 Mil.
Total Current Assets was $61.4 Mil.
Total Assets was $114.1 Mil.
Property, Plant and Equipment(Net PPE) was $26.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.0 Mil.
Selling, General & Admin. Expense(SGA) was $84.4 Mil.
Total Current Liabilities was $16.5 Mil.
Long-Term Debt was $0.0 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)|
|=||(27.652 / 160.75)||/||(22.513 / 144.691)|
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)|
|=||(31.561 / 144.691)||/||(29.28 / 160.75)|
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 - (162.28 + 28.747) / 211.957)||/||(1 - (61.443 + 26.384) / 114.121)|
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))|
|=||(10.035 / (10.035 + 26.384))||/||(10.581 / (10.581 + 28.747))|
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)|
|=||(96.818 / 160.75)||/||(84.447 / 144.691)|
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)|
|=||((0 + 19.809) / 211.957)||/||((0 + 16.48) / 114.121)|
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|
|=||(-5.072 - 0.041||-||2.231)||/||211.957|
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.
Spectranetics Corp has a M-score of -2.57 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
Spectranetics Corp Annual Data
Spectranetics Corp Quarterly Data