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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.61 (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 -2.61 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.82
Current: -2.61

-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 * 0.8625+0.528 * 1.0068+0.404 * 1.0994+0.892 * 0.9991+0.115 * 0.9431
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.912+4.679 * -0.0153-0.327 * 0.9466
=-2.61

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,240 Mil.
Revenue was 1410 + 1345 + 1439 + 1372 = $5,566 Mil.
Gross Profit was 986 + 950 + 1014 + 960 = $3,910 Mil.
Total Current Assets was $3,426 Mil.
Total Assets was $9,634 Mil.
Property, Plant and Equipment(Net PPE) was $1,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $1,745 Mil.
Total Current Liabilities was $3,014 Mil.
Long-Term Debt was $1,762 Mil.
Net Income was 290 + 262 + 245 + 238 = $1,035 Mil.
Non Operating Income was 0 + 3 + -2 + 0 = $1 Mil.
Cash Flow from Operations was 207 + 234 + 400 + 340 = $1,181 Mil.
Accounts Receivable was $1,439 Mil.
Revenue was 1448 + 1363 + 1422 + 1338 = $5,571 Mil.
Gross Profit was 1015 + 980 + 992 + 953 = $3,940 Mil.
Total Current Assets was $4,220 Mil.
Total Assets was $10,443 Mil.
Property, Plant and Equipment(Net PPE) was $1,382 Mil.
Depreciation, Depletion and Amortization(DDA) was $311 Mil.
Selling, General & Admin. Expense(SGA) was $1,915 Mil.
Total Current Liabilities was $1,827 Mil.
Long-Term Debt was $3,642 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)
=(1240 / 5566) / (1439 / 5571)
=0.22278117 / 0.25830192
=0.8625

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)
=(950 / 5571) / (986 / 5566)
=0.70723389 / 0.70247934
=1.0068

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 - (3426 + 1298) / 9634) / (1 - (4220 + 1382) / 10443)
=0.50965331 / 0.46356411
=1.0994

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
=5566 / 5571
=0.9991

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))
=(311 / (311 + 1382)) / (314 / (314 + 1298))
=0.18369758 / 0.19478908
=0.9431

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)
=(1745 / 5566) / (1915 / 5571)
=0.3135106 / 0.34374439
=0.912

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)
=((1762 + 3014) / 9634) / ((3642 + 1827) / 10443)
=0.49574424 / 0.52370009
=0.9466

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
=(1035 - 1 - 1181) / 9634
=-0.0153

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 -2.61 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 0.99020.98081.01440.93160.99071.03080.9451.00641.05450.836
GMI 0.96881.00460.99860.990.99931.007311.00891.00931.0112
AQI 1.57991.01830.8781.02270.90741.19750.92840.98711.0381.0085
SGI 1.27071.13281.14441.15451.07291.10331.08650.98060.99961.022
DEPI 0.90731.07711.0481.1851.09581.00370.88621.05680.95510.9278
SGAI 1.00411.08881.01091.02530.95410.98341.05550.92510.99670.9639
LVGI 1.35820.90761.18910.98761.09730.97451.04111.11281.02451.0124
TATA -0.0708-0.0173-0.0386-0.1004-0.0124-0.0425-0.0479-0.06-0.0046-0.0293
M-score -2.49-2.43-2.63-2.85-2.53-2.46-2.74-2.79-2.44-2.75

St Jude Medical Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.96181.04911.05281.05451.01541.02030.92730.8360.86640.8625
GMI 1.00921.00991.01681.00931.00591.01541.01291.01121.01591.0068
AQI 1.03311.02841.03951.0380.99910.98921.02371.00851.09321.0994
SGI 0.96710.97220.98430.99961.01471.02431.02831.0221.01410.9991
DEPI 1.04831.03210.9850.95510.9160.8930.91750.92780.92940.9431
SGAI 0.93760.93920.94850.99670.99191.0031.01380.96390.95460.912
LVGI 1.11851.14221.14911.02451.02441.08491.10431.01240.97090.9466
TATA -0.0512-0.031-0.0144-0.0046-0.0137-0.0218-0.0307-0.0293-0.0266-0.0153
M-score -2.79-2.62-2.53-2.44-2.53-2.58-2.69-2.75-2.66-2.61
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