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GuruFocus has detected 5 Warning Signs with SunPower Corp $SPWR.
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SunPower Corp (NAS:SPWR)
Beneish M-Score
-1.71 (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.

SunPower Corp has a M-score of -1.71 signals that the company is a manipulator.

SPWR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.1   Max: -1.06
Current: -1.71

-3.1
-1.06

During the past 13 years, the highest Beneish M-Score of SunPower Corp was -1.06. The lowest was -3.10. And the median was -2.36.


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 SunPower 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 * 0.7103+0.528 * 2.0909+0.404 * 0.9605+0.892 * 1.6236+0.115 * 1.0459
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5866+4.679 * -0.0251-0.327 * 1.12
=-1.71

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $220 Mil.
Revenue was 1024.889 + 729.346 + 420.452 + 384.875 = $2,560 Mil.
Gross Profit was -32.073 + 129.208 + 41.294 + 51.537 = $190 Mil.
Total Current Assets was $1,915 Mil.
Total Assets was $4,567 Mil.
Property, Plant and Equipment(Net PPE) was $1,682 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $329 Mil.
Total Current Liabilities was $1,090 Mil.
Long-Term Debt was $1,799 Mil.
Net Income was -275.118 + -40.545 + -69.992 + -85.409 = $-471 Mil.
Non Operating Income was 8.184 + -40.228 + -5.822 + -6.232 = $-44 Mil.
Cash Flow from Operations was 486.055 + -128.346 + -300.091 + -369.901 = $-312 Mil.
Accounts Receivable was $190 Mil.
Revenue was 374.364 + 380.218 + 381.02 + 440.871 = $1,576 Mil.
Gross Profit was 20.303 + 62.644 + 70.881 + 90.818 = $245 Mil.
Total Current Assets was $2,515 Mil.
Total Assets was $4,857 Mil.
Property, Plant and Equipment(Net PPE) was $1,268 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $345 Mil.
Total Current Liabilities was $999 Mil.
Long-Term Debt was $1,745 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)
=(219.638 / 2559.562) / (190.448 / 1576.473)
=0.08581078 / 0.12080638
=0.7103

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)
=(244.646 / 1576.473) / (189.966 / 2559.562)
=0.15518566 / 0.07421817
=2.0909

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 - (1914.699 + 1681.904) / 4567.167) / (1 - (2514.52 + 1267.822) / 4856.993)
=0.21250898 / 0.2212585
=0.9605

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
=2559.562 / 1576.473
=1.6236

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))
=(138.007 / (138.007 + 1267.822)) / (174.209 / (174.209 + 1681.904))
=0.0981677 / 0.09385689
=1.0459

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)
=(329.061 / 2559.562) / (345.486 / 1576.473)
=0.12856145 / 0.21915123
=0.5866

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)
=((1798.97 + 1090.175) / 4567.167) / ((1744.583 + 998.602) / 4856.993)
=0.63259018 / 0.56479081
=1.12

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
=(-471.064 - -44.098 - -312.283) / 4567.167
=-0.0251

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.

SunPower Corp has a M-score of -1.71 signals that the company is likely to 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 local exchange's currency.

SunPower Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.04780.68221.04511.05221.07550.89150.87331.15830.72520.7103
GMI 1.11860.78441.30660.81012.41160.93480.52040.94851.33072.0909
AQI 1.92471.03540.91571.09750.57531.09631.1261.45950.71650.9605
SGI 3.27591.85551.06031.45591.06991.01821.03711.20740.52081.6236
DEPI 0.71261.26930.80710.65991.16071.27711.32140.65121.56181.0459
SGAI 1.52450.8651.03271.16230.96210.91950.84370.87962.3010.5866
LVGI 4.09511.04510.97030.97441.27320.98641.03820.84931.2051.12
TATA 0.0089-0.0191-0.0388-0.0256-0.1466-0.1263-0.01340.05460.1099-0.0251
M-score -1.06-2.16-2.46-2.26-2.52-3.10-2.78-1.71-2.81-1.71

SunPower Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.40231.15831.62851.17440.42080.72520.69240.82921.33990.7103
GMI 0.80570.94851.16431.16430.97051.33071.47491.77461.61062.0909
AQI 0.87121.45951.03150.80681.40440.71651.41520.93520.66330.9605
SGI 0.98181.20741.08251.06140.94610.52080.54780.58890.80671.6236
DEPI 1.12030.65121.04091.67980.94751.56180.61020.93831.22321.0459
SGAI 0.99370.87960.97850.99791.14592.3012.29172.07861.45190.5866
LVGI 1.04560.84930.94670.92780.92641.2051.22231.23741.23581.12
TATA 0.04880.05460.08050.08910.08540.10990.14850.14420.1623-0.0251
M-score -2.05-1.71-1.33-1.74-2.52-2.81-2.39-2.22-1.52-1.71
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