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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.67 (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.

St Jude Medical Inc has a M-score of -2.67 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.82
Current: -2.67

-2.85
-1.82

During the past 13 years, the highest Beneish M-Score of St Jude Medical Inc was -1.82. The lowest was -2.85. And the median was -2.54.


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 St Jude Medical Inc 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 * 0.8664+0.528 * 1.0159+0.404 * 1.0932+0.892 * 1.0141+0.115 * 0.9294
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0082+4.679 * -0.0266-0.327 * 0.9709
=-2.67

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,194 Mil.
Revenue was 1345 + 1439 + 1372 + 1448 = $5,604 Mil.
Gross Profit was 950 + 1014 + 960 + 1015 = $3,939 Mil.
Total Current Assets was $3,193 Mil.
Total Assets was $9,414 Mil.
Property, Plant and Equipment(Net PPE) was $1,308 Mil.
Depreciation, Depletion and Amortization(DDA) was $312 Mil.
Selling, General & Admin. Expense(SGA) was $1,821 Mil.
Total Current Liabilities was $2,766 Mil.
Long-Term Debt was $1,767 Mil.
Net Income was 262 + 245 + 238 + 270 = $1,015 Mil.
Non Operating Income was 3 + -2 + 0 + -1 = $0 Mil.
Cash Flow from Operations was 234 + 400 + 340 + 291 = $1,265 Mil.
Accounts Receivable was $1,359 Mil.
Revenue was 1363 + 1422 + 1338 + 1403 = $5,526 Mil.
Gross Profit was 980 + 992 + 953 + 1021 = $3,946 Mil.
Total Current Assets was $3,979 Mil.
Total Assets was $10,291 Mil.
Property, Plant and Equipment(Net PPE) was $1,399 Mil.
Depreciation, Depletion and Amortization(DDA) was $305 Mil.
Selling, General & Admin. Expense(SGA) was $1,781 Mil.
Total Current Liabilities was $1,257 Mil.
Long-Term Debt was $3,847 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)
=(1194 / 5604) / (1359 / 5526)
=0.2130621 / 0.24592834
=0.8664

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)
=(1014 / 5526) / (950 / 5604)
=0.7140789 / 0.70289079
=1.0159

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 - (3193 + 1308) / 9414) / (1 - (3979 + 1399) / 10291)
=0.5218823 / 0.47740744
=1.0932

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
=5604 / 5526
=1.0141

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))
=(305 / (305 + 1399)) / (312 / (312 + 1308))
=0.17899061 / 0.19259259
=0.9294

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)
=(1821 / 5604) / (1781 / 5526)
=0.32494647 / 0.32229461
=1.0082

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)
=((1767 + 2766) / 9414) / ((3847 + 1257) / 10291)
=0.48151689 / 0.49596735
=0.9709

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
=(1015 - 0 - 1265) / 9414
=-0.0266

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.

St Jude Medical Inc has a M-score of -2.67 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.

St Jude Medical Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99020.98081.01440.93160.99071.03080.94511.00641.05450.836
GMI 0.96881.00460.99860.990.99931.00731.00021.00881.00931.0112
AQI 1.57991.01830.8781.02270.90741.19750.94290.9721.0381.0085
SGI 1.27071.13281.14441.15451.07291.10331.08660.98060.99961.022
DEPI 0.90731.07711.0481.1851.09581.00370.88541.05770.95510.9278
SGAI 1.00411.08881.01091.02530.95410.98341.05520.92540.95491.0061
LVGI 1.35820.90761.18910.98761.09730.97451.0281.12711.02451.0124
TATA -0.0708-0.0173-0.0386-0.1004-0.0124-0.0425-0.0473-0.06-0.0046-0.0293
M-score -2.49-2.43-2.63-2.85-2.53-2.46-2.73-2.80-2.44-2.75

St Jude Medical Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.00640.96181.04931.05281.05451.01541.02030.92730.8360.8664
GMI 1.00881.00921.00991.01671.00931.00591.01541.01291.01121.0159
AQI 0.9721.03311.02841.03951.0380.99910.98921.02371.00851.0932
SGI 0.98060.96710.97210.98430.99961.01471.02431.02831.0221.0141
DEPI 1.05771.05051.03510.89620.95510.9160.8930.91750.92780.9294
SGAI 0.92540.93760.93950.94860.95490.93910.95060.96150.99471.0082
LVGI 1.12711.11851.14221.14911.02451.02441.08491.10431.01240.9709
TATA -0.06-0.0512-0.031-0.0144-0.0046-0.0137-0.0218-0.0307-0.0293-0.0266
M-score -2.80-2.79-2.62-2.54-2.44-2.52-2.57-2.69-2.75-2.67
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