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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

STJ' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.82
Current: -2.56

-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 * 1.0203+0.528 * 1.0154+0.404 * 0.9892+0.892 * 1.0243+0.115 * 0.893
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.003+4.679 * -0.018-0.327 * 1.0849
=-2.56

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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.
Net Income was 270 + 249 + 123 + 262 = $904 Mil.
Non Operating Income was -21 + -20 + 1 + 3 = $-37 Mil.
Cash Flow from Operations was 291 + 273 + 290 + 275 = $1,129 Mil.
Accounts Receivable was $1,377 Mil.
Revenue was 1403 + 1338 + 1372 + 1326 = $5,439 Mil.
Gross Profit was 1021 + 961 + 953 + 971 = $3,906 Mil.
Total Current Assets was $3,701 Mil.
Total Assets was $9,660 Mil.
Property, Plant and Equipment(Net PPE) was $1,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $281 Mil.
Selling, General & Admin. Expense(SGA) was $1,864 Mil.
Total Current Liabilities was $1,568 Mil.
Long-Term Debt was $3,095 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)
=(1439 / 5571) / (1377 / 5439)
=0.25830192 / 0.25317154
=1.0203

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)
=(980 / 5439) / (1015 / 5571)
=0.71814672 / 0.70723389
=1.0154

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 - (4220 + 1382) / 10443) / (1 - (3701 + 1432) / 9660)
=0.46356411 / 0.46863354
=0.9892

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
=5571 / 5439
=1.0243

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))
=(281 / (281 + 1432)) / (311 / (311 + 1382))
=0.1640397 / 0.18369758
=0.893

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)
=(1915 / 5571) / (1864 / 5439)
=0.34374439 / 0.34271006
=1.003

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)
=((3642 + 1827) / 10443) / ((3095 + 1568) / 9660)
=0.52370009 / 0.48271222
=1.0849

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
=(904 - -37 - 1129) / 10443
=-0.018

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 -2.56 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 0.95230.97580.9721.03311.02841.03951.0380.99910.98921.0257
SGI 1.03380.99690.98060.96710.97210.98430.99961.01471.02431.0283
DEPI 0.98081.23841.05771.05051.03510.89620.95510.9160.8931.1787
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 -0.0501-0.0561-0.06-0.0512-0.031-0.0144-0.0046-0.0118-0.0180.0045
M-score -2.83-2.72-2.80-2.79-2.62-2.54-2.44-2.52-2.56-2.50
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