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St Jude Medical Inc (NYSE:STJ)
Beneish M-Score
-2.34 (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 -2.34 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: -2.34

-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 * 1.0156+0.528 * 1.0459+0.404 * 1.5293+0.892 * 1.0765+0.115 * 0.831
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0965+4.679 * -0.0305-0.327 * 0.994
=-2.34

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,290 Mil.
Revenue was 1499 + 1562 + 1448 + 1447 = $5,956 Mil.
Gross Profit was 1004 + 1066 + 961 + 946 = $3,977 Mil.
Total Current Assets was $2,816 Mil.
Total Assets was $12,541 Mil.
Property, Plant and Equipment(Net PPE) was $1,336 Mil.
Depreciation, Depletion and Amortization(DDA) was $415 Mil.
Selling, General & Admin. Expense(SGA) was $2,062 Mil.
Total Current Liabilities was $1,457 Mil.
Long-Term Debt was $5,403 Mil.
Net Income was 212 + 238 + 95 + 113 = $658 Mil.
Non Operating Income was -2 + -3 + -53 + 7 = $-51 Mil.
Cash Flow from Operations was 442 + 313 + 150 + 187 = $1,092 Mil.
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.



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)
=(1290 / 5956) / (1180 / 5533)
=0.21658831 / 0.21326586
=1.0156

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)
=(3864 / 5533) / (3977 / 5956)
=0.69835532 / 0.66773002
=1.0459

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 - (2816 + 1336) / 12541) / (1 - (4991 + 1268) / 11125)
=0.66892592 / 0.43739326
=1.5293

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
=5956 / 5533
=1.0765

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))
=(311 / (311 + 1268)) / (415 / (415 + 1336))
=0.1969601 / 0.23700742
=0.831

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)
=(2062 / 5956) / (1747 / 5533)
=0.34620551 / 0.31574191
=1.0965

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)
=((5403 + 1457) / 12541) / ((3264 + 2858) / 11125)
=0.54700582 / 0.55029213
=0.994

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
=(658 - -51 - 1092) / 12541
=-0.0305

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 -2.34 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 local exchange's 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 1.01830.8781.02270.90741.19750.94290.9721.0381.00991.3565
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 0.90761.18910.98761.09730.97451.0281.12711.02451.01091.2346
TATA -0.0214-0.0546-0.1004-0.0124-0.0425-0.0473-0.06-0.0046-0.0293-0.0122
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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02030.92730.8360.86640.86250.89611.0331.04781.031.0156
GMI 1.01541.01291.01121.01591.00681.00841.03051.04211.04751.0459
AQI 0.98921.02371.00991.09321.09940.88831.35651.28611.30291.5293
SGI 1.02431.02831.0221.01410.99910.98720.98561.00711.04131.0765
DEPI 0.8930.91750.92780.92940.94310.940.92870.90290.86390.831
SGAI 0.98620.98511.00611.01990.9970.98591.02661.04521.07161.0965
LVGI 1.08491.10431.01090.97090.94661.11721.23461.19471.13850.994
TATA -0.0218-0.0307-0.0293-0.0266-0.0153-0.0206-0.0122-0.0147-0.0268-0.0305
M-score -2.58-2.69-2.75-2.67-2.62-2.77-2.45-2.44-2.47-2.34
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