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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

STJ' s Beneish M-Score Range Over the Past 10 Years
Min: -2.85   Max: -1.82
Current: -2.77

-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 * 0.8961+0.528 * 1.0084+0.404 * 0.8883+0.892 * 0.9872+0.115 * 0.94
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9859+4.679 * -0.0206-0.327 * 1.1172
=-2.77

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,180 Mil.
Revenue was 1339 + 1410 + 1345 + 1439 = $5,533 Mil.
Gross Profit was 914 + 986 + 950 + 1014 = $3,864 Mil.
Total Current Assets was $4,991 Mil.
Total Assets was $11,125 Mil.
Property, Plant and Equipment(Net PPE) was $1,268 Mil.
Depreciation, Depletion and Amortization(DDA) was $311 Mil.
Selling, General & Admin. Expense(SGA) was $1,747 Mil.
Total Current Liabilities was $2,858 Mil.
Long-Term Debt was $3,264 Mil.
Net Income was 215 + 290 + 262 + 245 = $1,012 Mil.
Non Operating Income was -12 + 0 + 3 + -2 = $-11 Mil.
Cash Flow from Operations was 411 + 207 + 234 + 400 = $1,252 Mil.
Accounts Receivable was $1,334 Mil.
Revenue was 1372 + 1448 + 1363 + 1422 = $5,605 Mil.
Gross Profit was 960 + 1015 + 980 + 992 = $3,947 Mil.
Total Current Assets was $3,836 Mil.
Total Assets was $10,236 Mil.
Property, Plant and Equipment(Net PPE) was $1,360 Mil.
Depreciation, Depletion and Amortization(DDA) was $309 Mil.
Selling, General & Admin. Expense(SGA) was $1,795 Mil.
Total Current Liabilities was $1,988 Mil.
Long-Term Debt was $3,054 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)
=(1180 / 5533) / (1334 / 5605)
=0.21326586 / 0.23800178
=0.8961

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)
=(986 / 5605) / (914 / 5533)
=0.70419269 / 0.69835532
=1.0084

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 - (4991 + 1268) / 11125) / (1 - (3836 + 1360) / 10236)
=0.43739326 / 0.49237984
=0.8883

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
=5533 / 5605
=0.9872

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))
=(309 / (309 + 1360)) / (311 / (311 + 1268))
=0.1851408 / 0.1969601
=0.94

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)
=(1747 / 5533) / (1795 / 5605)
=0.31574191 / 0.32024978
=0.9859

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)
=((3264 + 2858) / 11125) / ((3054 + 1988) / 10236)
=0.55029213 / 0.49257522
=1.1172

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
=(1012 - -11 - 1252) / 11125
=-0.0206

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 -2.77 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98081.01440.93160.99071.03080.94511.00641.05450.8361.033
GMI 1.00460.99860.990.99931.00731.00021.00881.00931.01121.0305
AQI 1.01830.8781.02270.90741.19750.94290.9721.0381.00851.3383
SGI 1.13281.14441.15451.07291.10331.08660.98060.99961.0220.9856
DEPI 1.07711.0481.1851.09581.00370.88541.05770.95510.92782.3216
SGAI 1.08881.01091.02530.95410.98341.05520.92540.95491.00611.0266
LVGI 0.90761.18910.98761.09730.97451.0281.12711.02451.01241.2184
TATA -0.0173-0.0386-0.1004-0.0124-0.0425-0.0473-0.06-0.0046-0.02930.0752
M-score -2.43-2.63-2.85-2.53-2.46-2.73-2.80-2.44-2.75-1.88

St Jude Medical Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.05281.05451.01541.02030.92730.8360.86640.86250.89611.033
GMI 1.01671.00931.00591.01541.01291.01121.01591.00681.00841.0305
AQI 1.03951.0380.99910.98921.02371.00851.09321.09940.88831.3383
SGI 0.98430.99961.01471.02431.02831.0221.01410.99910.98720.9856
DEPI 0.89620.95510.9160.8930.91750.92780.92940.94310.941.078
SGAI 0.94860.95490.93910.93960.93851.00611.01990.9970.98591.0266
LVGI 1.14911.02451.02441.08491.10431.01240.97090.94661.11721.2184
TATA -0.0144-0.0046-0.0137-0.0218-0.0307-0.0293-0.0266-0.0153-0.02060.0053
M-score -2.54-2.44-2.52-2.57-2.68-2.75-2.67-2.62-2.77-2.35
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