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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 -2.55 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 -2.27.
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 * 1.2636||+||0.528 * 0.9858||+||0.404 * 4.6283||+||0.892 * 1.1968||+||0.115 * 0.9565|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1565||+||4.679 * -0.0369||-||0.327 * 6.3334|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $36.2 Mil.|
Revenue was 58.786 + 43.555 + 39.614 + 41.92 = $183.9 Mil.
Gross Profit was 43.086 + 33.049 + 29.28 + 31.561 = $137.0 Mil.
Total Current Assets was $174.6 Mil.
Total Assets was $469.3 Mil.
Property, Plant and Equipment(Net PPE) was $32.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.6 Mil.
Selling, General & Admin. Expense(SGA) was $123.3 Mil.
Total Current Liabilities was $33.4 Mil.
Long-Term Debt was $230.0 Mil.
Net Income was -13.944 + -6.565 + -5.661 + 0.883 = $-25.3 Mil.
Non Operating Income was -0.122 + -0.001 + 0.003 + -0.005 = $-0.1 Mil.
Cash Flow from Operations was -3.403 + -1.111 + -8.359 + 5.029 = $-7.8 Mil.
|Accounts Receivable was $23.9 Mil.
Revenue was 39.763 + 39.453 + 37.675 + 36.751 = $153.6 Mil.
Gross Profit was 29.71 + 28.828 + 27.356 + 26.936 = $112.8 Mil.
Total Current Assets was $161.3 Mil.
Total Assets was $213.6 Mil.
Property, Plant and Equipment(Net PPE) was $26.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.5 Mil.
Selling, General & Admin. Expense(SGA) was $89.1 Mil.
Total Current Liabilities was $18.9 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)|
|=||(36.186 / 183.875)||/||(23.928 / 153.642)|
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)|
|=||(33.049 / 153.642)||/||(43.086 / 183.875)|
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 - (174.563 + 32.435) / 469.34)||/||(1 - (161.273 + 26.565) / 213.639)|
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))|
|=||(10.47 / (10.47 + 26.565))||/||(13.609 / (13.609 + 32.435))|
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)|
|=||(123.256 / 183.875)||/||(89.056 / 153.642)|
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)|
|=||((230 + 33.389) / 469.34)||/||((0 + 18.93) / 213.639)|
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|
|=||(-25.287 - -0.125||-||-7.844)||/||469.34|
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 -2.55 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