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Spectranetics Corp (NAS:SPNC)
Beneish M-Score
-2.26 (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.

Spectranetics Corp has a M-score of -2.26 suggests that the company is not a manipulator.

SPNC' s 10-Year Beneish M-Score Range
Min: -3.94   Max: 1.15
Current: -2.26

-3.94
1.15

During the past 13 years, the highest Beneish M-Score of Spectranetics Corp was 1.15. The lowest was -3.94. And the median was -2.28.


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 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 * 1.4688+0.528 * 0.9725+0.404 * 4.5789+0.892 * 1.1056+0.115 * 1.0817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1017+4.679 * -0.021-0.327 * 5.9994
=-2.26

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $38.0 Mil.
Revenue was 43.555 + 39.614 + 41.92 + 39.763 = $164.9 Mil.
Gross Profit was 33.049 + 29.28 + 31.561 + 29.71 = $123.6 Mil.
Total Current Assets was $175.7 Mil.
Total Assets was $476.3 Mil.
Property, Plant and Equipment(Net PPE) was $30.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $106.2 Mil.
Total Current Liabilities was $33.1 Mil.
Long-Term Debt was $230.0 Mil.
Net Income was -6.565 + -5.661 + 0.883 + 0.434 = $-10.9 Mil.
Non Operating Income was -0.001 + 0.003 + -0.005 + 0.035 = $0.0 Mil.
Cash Flow from Operations was -1.111 + -8.359 + 5.029 + 3.513 = $-0.9 Mil.
Accounts Receivable was $23.4 Mil.
Revenue was 39.453 + 37.675 + 36.751 + 35.23 = $149.1 Mil.
Gross Profit was 28.828 + 27.356 + 26.936 + 25.606 = $108.7 Mil.
Total Current Assets was $157.8 Mil.
Total Assets was $210.2 Mil.
Property, Plant and Equipment(Net PPE) was $26.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.2 Mil.
Selling, General & Admin. Expense(SGA) was $87.2 Mil.
Total Current Liabilities was $19.4 Mil.
Long-Term Debt was $0.0 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)
=(38.045 / 164.852) / (23.429 / 149.109)
=0.23078276 / 0.15712667
=1.4688

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)
=(29.28 / 149.109) / (33.049 / 164.852)
=0.72917128 / 0.74976342
=0.9725

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 - (175.689 + 30.534) / 476.306) / (1 - (157.833 + 26.346) / 210.211)
=0.56703674 / 0.12383748
=4.5789

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
=164.852 / 149.109
=1.1056

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))
=(10.163 / (10.163 + 26.346)) / (10.581 / (10.581 + 30.534))
=0.27836972 / 0.25735133
=1.0817

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)
=(106.163 / 164.852) / (87.157 / 149.109)
=0.64398976 / 0.58451871
=1.1017

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 + 33.148) / 476.306) / ((0 + 19.358) / 210.211)
=0.55247677 / 0.09208843
=5.9994

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
=(-10.909 - 0.032 - -0.928) / 476.306
=-0.021

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 -2.26 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.

Spectranetics Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.09621.01280.93510.98880.85850.95070.93431.07180.99861.1854
GMI 0.95990.98671.03210.99711.02461.008510.98890.98590.9866
AQI 1.57210.49161.26610.73123.22480.84990.30141.80911.10160.7703
SGI 1.24541.2451.46931.30531.2551.10411.02681.07951.10211.1321
DEPI 1.15251.57011.07340.97540.85160.77840.92580.96330.99930.982
SGAI 1.01231.00261.12240.96281.01251.10430.94310.86971.05860.9853
LVGI 0.97091.04050.4841.02560.98991.02791.31821.29180.71090.5867
TATA 0.05350.02780.05750.06960.0093-0.0735-0.2237-0.0535-0.0265-0.0212
M-score -1.69-2.28-1.57-2.01-1.44-2.89-3.95-2.35-2.40-2.26

Spectranetics Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99050.97861.05840.99861.12081.07451.05981.18541.10561.4688
GMI 0.97920.97190.9790.98590.99541.00040.99230.98660.9810.9725
AQI 2.28132.32272.16071.10161.63570.89870.90780.77030.42864.5789
SGI 1.09051.09411.09661.10211.11191.12151.12921.13211.1111.1056
DEPI 0.97920.97590.98040.99930.95440.94770.94890.9821.02421.0817
SGAI 0.90780.94051.04691.05861.02991.01620.99720.98531.0321.1017
LVGI 0.87990.79130.84130.71090.84480.56420.54220.58670.64725.9994
TATA -0.00870.021-0.0072-0.0265-0.0188-0.025-0.0257-0.0212-0.0346-0.021
M-score -1.89-1.72-1.87-2.40-2.06-2.33-2.33-2.26-2.57-2.26
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