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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 Corporation has a M-score of -2.26 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Spectranetics Corporation was -0.04. 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 Corporation 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 * 1.1854||+||0.528 * 0.9866||+||0.404 * 0.7703||+||0.892 * 1.1321||+||0.115 * 0.982|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9853||+||4.679 * -0.0212||-||0.327 * 0.5867|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $26.8 Mil.|
Revenue was 41.92 + 39.763 + 39.453 + 37.675 = $158.8 Mil.
Gross Profit was 31.561 + 29.71 + 28.828 + 27.356 = $117.5 Mil.
Total Current Assets was $167.8 Mil.
Total Assets was $217.2 Mil.
Property, Plant and Equipment(Net PPE) was $28.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $91.8 Mil.
Total Current Liabilities was $23.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 0.883 + 0.434 + -0.728 + -0.959 = $-0.4 Mil.
Non Operating Income was -0.005 + 0.035 + 0.008 + -0.025 = $0.0 Mil.
Cash Flow from Operations was 5.029 + 3.513 + 2.048 + -6.377 = $4.2 Mil.
|Accounts Receivable was $19.9 Mil.
Revenue was 36.751 + 35.23 + 35.035 + 33.269 = $140.3 Mil.
Gross Profit was 26.936 + 25.606 + 25.515 + 24.301 = $102.4 Mil.
Total Current Assets was $69.8 Mil.
Total Assets was $110.8 Mil.
Property, Plant and Equipment(Net PPE) was $27.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.9 Mil.
Selling, General & Admin. Expense(SGA) was $82.3 Mil.
Total Current Liabilities was $20.2 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)|
|=||(26.766 / 158.811)||/||(19.945 / 140.285)|
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)|
|=||(29.71 / 140.285)||/||(31.561 / 158.811)|
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 - (167.83 + 28.281) / 217.157)||/||(1 - (69.827 + 27.006) / 110.769)|
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))|
|=||(9.883 / (9.883 + 27.006))||/||(10.61 / (10.61 + 28.281))|
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)|
|=||(91.75 / 158.811)||/||(82.254 / 140.285)|
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 + 23.225) / 217.157)||/||((0 + 20.193) / 110.769)|
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|
|=||(-0.37 - 0.013||-||4.213)||/||217.157|
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 Corporation has a M-score of -2.26 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 Corporation Annual Data
Spectranetics Corporation Quarterly Data