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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.47 (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 -2.47 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: -2.47

-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 -2.57.


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 * 1.03+0.528 * 1.0475+0.404 * 1.3029+0.892 * 1.0413+0.115 * 0.8639
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0716+4.679 * -0.0268-0.327 * 1.1385
=-2.47

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,330 Mil.
Revenue was 1562 + 1448 + 1447 + 1339 = $5,796 Mil.
Gross Profit was 1066 + 961 + 946 + 914 = $3,887 Mil.
Total Current Assets was $2,927 Mil.
Total Assets was $12,658 Mil.
Property, Plant and Equipment(Net PPE) was $1,326 Mil.
Depreciation, Depletion and Amortization(DDA) was $386 Mil.
Selling, General & Admin. Expense(SGA) was $1,994 Mil.
Total Current Liabilities was $1,713 Mil.
Long-Term Debt was $5,431 Mil.
Net Income was 238 + 95 + 113 + 215 = $661 Mil.
Non Operating Income was -3 + -53 + 7 + -12 = $-61 Mil.
Cash Flow from Operations was 313 + 150 + 187 + 411 = $1,061 Mil.
Accounts Receivable was $1,240 Mil.
Revenue was 1410 + 1345 + 1439 + 1372 = $5,566 Mil.
Gross Profit was 986 + 950 + 1014 + 960 = $3,910 Mil.
Total Current Assets was $3,426 Mil.
Total Assets was $9,634 Mil.
Property, Plant and Equipment(Net PPE) was $1,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $1,787 Mil.
Total Current Liabilities was $3,014 Mil.
Long-Term Debt was $1,762 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)
=(1330 / 5796) / (1240 / 5566)
=0.2294686 / 0.22278117
=1.03

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)
=(3910 / 5566) / (3887 / 5796)
=0.70247934 / 0.67063492
=1.0475

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 - (2927 + 1326) / 12658) / (1 - (3426 + 1298) / 9634)
=0.66400695 / 0.50965331
=1.3029

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
=5796 / 5566
=1.0413

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))
=(314 / (314 + 1298)) / (386 / (386 + 1326))
=0.19478908 / 0.22546729
=0.8639

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)
=(1994 / 5796) / (1787 / 5566)
=0.34403037 / 0.32105641
=1.0716

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)
=((5431 + 1713) / 12658) / ((1762 + 3014) / 9634)
=0.56438616 / 0.49574424
=1.1385

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
=(661 - -61 - 1061) / 12658
=-0.0268

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 -2.47 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 1.01830.8781.02270.90741.19750.94290.9721.0381.00991.3365
SGI 1.13281.14441.15451.07291.10331.08660.98060.99961.0220.9856
DEPI 1.07711.0481.1851.09581.00370.88541.05770.95510.92780.9287
SGAI 1.08881.01091.02530.95410.98341.05520.88231.00151.00611.0266
LVGI 0.90761.18910.98761.09730.97451.0281.12711.02451.01091.2202
TATA -0.0214-0.0546-0.1004-0.0124-0.0425-0.0473-0.06-0.0046-0.0293-0.012
M-score -2.45-2.70-2.85-2.53-2.46-2.73-2.79-2.44-2.75-2.45

St Jude Medical Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.01541.02030.92730.8360.86640.86250.89611.0331.04781.03
GMI 1.00591.01541.01291.01121.01591.00681.00841.03051.04211.0475
AQI 0.99910.98921.02371.00991.09321.09940.88831.33651.28611.3029
SGI 1.01471.02431.02831.0221.01410.99910.98720.98561.00711.0413
DEPI 0.9160.8930.91750.92780.92940.94310.940.92870.90290.8639
SGAI 0.98550.98620.98511.00611.01990.9970.98591.02661.04521.0716
LVGI 1.02441.08491.10431.01090.97090.94661.11721.22021.19471.1385
TATA -0.0137-0.0218-0.0307-0.0293-0.0266-0.0153-0.0206-0.012-0.0147-0.0268
M-score -2.53-2.58-2.69-2.75-2.67-2.62-2.77-2.45-2.44-2.47
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