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St Jude Medical, Inc. (NYSE:STJ)
Beneish M-Score
-2.44 (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 -2.44 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.93
Current: -2.44

-2.85
-1.93

During the past 13 years, the highest Beneish M-Score of St Jude Medical, Inc. was -1.93. The lowest was -2.85. And the median was -2.51.


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 * 1.0545+0.528 * 1.0093+0.404 * 1.038+0.892 * 0.9996+0.115 * 0.9551
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9967+4.679 * -0.0046-0.327 * 1.0245
=-2.44

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,422 Mil.
Revenue was 1422 + 1338 + 1403 + 1338 = $5,501 Mil.
Gross Profit was 992 + 953 + 1021 + 961 = $3,927 Mil.
Total Current Assets was $3,910 Mil.
Total Assets was $10,248 Mil.
Property, Plant and Equipment(Net PPE) was $1,410 Mil.
Depreciation, Depletion and Amortization(DDA) was $297 Mil.
Selling, General & Admin. Expense(SGA) was $1,884 Mil.
Total Current Liabilities was $1,380 Mil.
Long-Term Debt was $3,518 Mil.
Net Income was 123 + 262 + 115 + 223 = $723 Mil.
Non Operating Income was 1 + 3 + -165 + -30 = $-191 Mil.
Cash Flow from Operations was 290 + 275 + 213 + 183 = $961 Mil.
Accounts Receivable was $1,349 Mil.
Revenue was 1372 + 1326 + 1410 + 1395 = $5,503 Mil.
Gross Profit was 953 + 971 + 1027 + 1014 = $3,965 Mil.
Total Current Assets was $3,551 Mil.
Total Assets was $9,271 Mil.
Property, Plant and Equipment(Net PPE) was $1,425 Mil.
Depreciation, Depletion and Amortization(DDA) was $284 Mil.
Selling, General & Admin. Expense(SGA) was $1,891 Mil.
Total Current Liabilities was $1,775 Mil.
Long-Term Debt was $2,550 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)
=(1422 / 5501) / (1349 / 5503)
=0.25849845 / 0.24513902
=1.0545

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)
=(953 / 5503) / (992 / 5501)
=0.72051608 / 0.71387021
=1.0093

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 - (3910 + 1410) / 10248) / (1 - (3551 + 1425) / 9271)
=0.48087432 / 0.46327257
=1.038

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
=5501 / 5503
=0.9996

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))
=(284 / (284 + 1425)) / (297 / (297 + 1410))
=0.16617905 / 0.17398946
=0.9551

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)
=(1884 / 5501) / (1891 / 5503)
=0.34248318 / 0.34363075
=0.9967

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)
=((3518 + 1380) / 10248) / ((2550 + 1775) / 9271)
=0.47794692 / 0.46650847
=1.0245

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
=(723 - -191 - 961) / 10248
=-0.0046

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 -2.44 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 10.94510.96170.90460.96971.00640.96181.04931.05281.0545
GMI 1.00871.00020.99950.99570.99831.00881.00921.00991.01671.0093
AQI 1.20310.94290.93940.95230.97580.9721.03311.02841.03951.038
SGI 1.10711.08661.06671.03380.99690.98060.96710.97210.98430.9996
DEPI 0.82830.88540.9280.98081.23841.05771.05051.03510.89620.9551
SGAI 1.05541.05521.02381.01060.98930.92540.93760.93950.94860.9967
LVGI 1.16551.0281.08481.10060.90481.12711.11851.14221.14911.0245
TATA -0.0542-0.0473-0.0493-0.0501-0.0561-0.06-0.0512-0.031-0.0144-0.0046
M-score -2.63-2.73-2.75-2.83-2.72-2.80-2.79-2.62-2.54-2.44
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