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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.82
Current: -2.69

-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 * 0.9273+0.528 * 1.0129+0.404 * 1.0237+0.892 * 1.0283+0.115 * 0.9175
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0138+4.679 * -0.0307-0.327 * 1.1043
=-2.69

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $1,939 Mil.
Total Current Liabilities was $1,988 Mil.
Long-Term Debt was $3,054 Mil.
Net Income was 238 + 270 + 249 + 123 = $880 Mil.
Non Operating Income was 0 + -1 + 0 + 1 = $0 Mil.
Cash Flow from Operations was 340 + 291 + 273 + 290 = $1,194 Mil.
Accounts Receivable was $1,399 Mil.
Revenue was 1338 + 1403 + 1338 + 1372 = $5,451 Mil.
Gross Profit was 953 + 1021 + 961 + 953 = $3,888 Mil.
Total Current Assets was $3,745 Mil.
Total Assets was $9,965 Mil.
Property, Plant and Equipment(Net PPE) was $1,427 Mil.
Depreciation, Depletion and Amortization(DDA) was $292 Mil.
Selling, General & Admin. Expense(SGA) was $1,860 Mil.
Total Current Liabilities was $1,042 Mil.
Long-Term Debt was $3,403 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)
=(1334 / 5605) / (1399 / 5451)
=0.23800178 / 0.25665016
=0.9273

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)
=(1015 / 5451) / (960 / 5605)
=0.71326362 / 0.70419269
=1.0129

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 - (3836 + 1360) / 10236) / (1 - (3745 + 1427) / 9965)
=0.49237984 / 0.48098344
=1.0237

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
=5605 / 5451
=1.0283

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))
=(292 / (292 + 1427)) / (309 / (309 + 1360))
=0.1698662 / 0.1851408
=0.9175

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)
=(1939 / 5605) / (1860 / 5451)
=0.34594112 / 0.34122179
=1.0138

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)
=((3054 + 1988) / 10236) / ((3403 + 1042) / 9965)
=0.49257522 / 0.44606121
=1.1043

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
=(880 - 0 - 1194) / 10236
=-0.0307

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 -2.69 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.90460.96971.00640.96181.04931.05281.05451.01541.02030.9273
GMI 0.99570.99831.00881.00921.00991.01671.00931.00591.01541.0129
AQI 0.95230.97580.9721.03311.02841.03951.0380.99910.98921.0237
SGI 1.03380.99690.98060.96710.97210.98430.99961.01471.02431.0283
DEPI 0.98081.23841.05771.05051.03510.89620.95510.9160.8930.9175
SGAI 1.01060.98930.92540.93760.93950.94860.99670.99191.0031.0138
LVGI 1.10060.90481.12711.11851.14221.14911.02451.02441.08491.1043
TATA -0.0501-0.0561-0.06-0.0512-0.031-0.0144-0.0046-0.0137-0.0218-0.0307
M-score -2.83-2.72-2.80-2.79-2.62-2.54-2.44-2.53-2.58-2.69
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