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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.53 (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 -2.53 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.82
Current: -2.53

-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 -2.53.


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 * 1.0154+0.528 * 1.0059+0.404 * 0.9991+0.892 * 1.0147+0.115 * 0.916
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9919+4.679 * -0.0137-0.327 * 1.0244
=-2.53

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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 $1,881 Mil.
Total Current Liabilities was $1,257 Mil.
Long-Term Debt was $3,847 Mil.
Net Income was 249 + 123 + 262 + 115 = $749 Mil.
Non Operating Income was 0 + 1 + 3 + -165 = $-161 Mil.
Cash Flow from Operations was 273 + 290 + 275 + 213 = $1,051 Mil.
Accounts Receivable was $1,319 Mil.
Revenue was 1338 + 1372 + 1326 + 1410 = $5,446 Mil.
Gross Profit was 961 + 953 + 971 + 1027 = $3,912 Mil.
Total Current Assets was $3,345 Mil.
Total Assets was $9,160 Mil.
Property, Plant and Equipment(Net PPE) was $1,438 Mil.
Depreciation, Depletion and Amortization(DDA) was $282 Mil.
Selling, General & Admin. Expense(SGA) was $1,869 Mil.
Total Current Liabilities was $1,602 Mil.
Long-Term Debt was $2,833 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)
=(1359 / 5526) / (1319 / 5446)
=0.24592834 / 0.24219611
=1.0154

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)
=(992 / 5446) / (980 / 5526)
=0.71832538 / 0.7140789
=1.0059

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 - (3979 + 1399) / 10291) / (1 - (3345 + 1438) / 9160)
=0.47740744 / 0.47783843
=0.9991

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
=5526 / 5446
=1.0147

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))
=(282 / (282 + 1438)) / (305 / (305 + 1399))
=0.16395349 / 0.17899061
=0.916

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)
=(1881 / 5526) / (1869 / 5446)
=0.34039088 / 0.34318766
=0.9919

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)
=((3847 + 1257) / 10291) / ((2833 + 1602) / 9160)
=0.49596735 / 0.48417031
=1.0244

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
=(749 - -161 - 1051) / 10291
=-0.0137

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 -2.53 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05930.99020.98081.01440.93160.99071.03080.94511.00641.0545
GMI 0.97710.96881.00460.99860.990.99931.00731.00021.00881.0093
AQI 1.08291.57991.01830.8781.02270.90741.19750.94290.9721.038
SGI 1.18711.27071.13281.14441.15451.07291.10331.08660.98060.9996
DEPI 0.97550.90731.07711.0481.1851.09581.00370.88541.05770.9551
SGAI 1.01141.00411.08881.01091.02530.95410.98341.05520.92540.9967
LVGI 0.77031.35820.90761.18910.98761.09730.97451.0281.12711.0245
TATA -0.0479-0.0708-0.0173-0.0386-0.1004-0.0124-0.0425-0.0473-0.06-0.0046
M-score -2.39-2.49-2.43-2.63-2.85-2.53-2.46-2.73-2.80-2.44

St Jude Medical Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.94510.96170.90460.96971.00640.96181.04931.05281.05451.0154
GMI 1.00020.99950.99570.99831.00881.00921.00991.01671.00931.0059
AQI 0.94290.93940.95230.97580.9721.03311.02841.03951.0380.9991
SGI 1.08661.06671.03380.99690.98060.96710.97210.98430.99961.0147
DEPI 0.88540.9280.98081.23841.05771.05051.03510.89620.95510.916
SGAI 1.05521.02381.01060.98930.92540.93760.93950.94860.99670.9919
LVGI 1.0281.08481.10060.90481.12711.11851.14221.14911.02451.0244
TATA -0.0473-0.0493-0.0501-0.0561-0.06-0.0512-0.031-0.0144-0.0046-0.0137
M-score -2.73-2.75-2.83-2.72-2.80-2.79-2.62-2.54-2.44-2.53
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