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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.72 (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.

STMicroelectronics NV has a M-score of -2.99 suggests that the company is not a manipulator.

STM' s 10-Year Beneish M-Score Range
Min: -3.56   Max: -1.85
Current: -2.72

-3.56
-1.85

During the past 13 years, the highest Beneish M-Score of STMicroelectronics NV was -1.85. The lowest was -3.56. And the median was -2.86.


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 STMicroelectronics NV 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 * 0.9468+0.528 * 1.0153+0.404 * 1.0383+0.892 * 0.9223+0.115 * 0.8097
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9999+4.679 * -0.0666-0.327 * 1.2462
=-2.99

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $971 Mil.
Revenue was 1705 + 1829 + 1886 + 1864 = $7,284 Mil.
Gross Profit was 566 + 619 + 646 + 517 = $2,348 Mil.
Total Current Assets was $4,989 Mil.
Total Assets was $8,712 Mil.
Property, Plant and Equipment(Net PPE) was $2,468 Mil.
Depreciation, Depletion and Amortization(DDA) was $781 Mil.
Selling, General & Admin. Expense(SGA) was $936 Mil.
Total Current Liabilities was $1,818 Mil.
Long-Term Debt was $1,575 Mil.
Net Income was -22 + 43 + 72 + 95 = $188 Mil.
Non Operating Income was 4 + 15 + 0 + -62 = $-43 Mil.
Cash Flow from Operations was 149 + 311 + 89 + 262 = $811 Mil.
Accounts Receivable was $1,112 Mil.
Revenue was 1825 + 2015 + 2013 + 2045 = $7,898 Mil.
Gross Profit was 599 + 662 + 652 + 672 = $2,585 Mil.
Total Current Assets was $4,700 Mil.
Total Assets was $9,017 Mil.
Property, Plant and Equipment(Net PPE) was $3,066 Mil.
Depreciation, Depletion and Amortization(DDA) was $741 Mil.
Selling, General & Admin. Expense(SGA) was $1,015 Mil.
Total Current Liabilities was $1,910 Mil.
Long-Term Debt was $908 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)
=(971 / 7284) / (1112 / 7898)
=0.13330588 / 0.14079514
=0.9468

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)
=(619 / 7898) / (566 / 7284)
=0.32729805 / 0.32235036
=1.0153

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 - (4989 + 2468) / 8712) / (1 - (4700 + 3066) / 9017)
=0.14405418 / 0.13873794
=1.0383

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
=7284 / 7898
=0.9223

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))
=(741 / (741 + 3066)) / (781 / (781 + 2468))
=0.19464145 / 0.24038166
=0.8097

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)
=(936 / 7284) / (1015 / 7898)
=0.12850082 / 0.12851355
=0.9999

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)
=((1575 + 1818) / 8712) / ((908 + 1910) / 9017)
=0.38946281 / 0.31252079
=1.2462

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
=(188 - -43 - 811) / 8712
=-0.0666

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.

STMicroelectronics NV has a M-score of -2.99 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.

STMicroelectronics NV Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.04370.96120.99520.67361.48590.74010.90381.10131.09690.948
GMI 1.07770.95641.01120.97751.17220.79521.0571.12041.01310.9587
AQI 0.9911.59121.31362.4060.8960.8561.05930.64840.94851.1025
SGI 1.01391.10941.01490.98410.86471.21570.94090.87240.95160.9161
DEPI 0.83531.10410.9930.9780.89171.06960.95361.01961.07810.9543
SGAI 1.06850.93741.01491.09751.12920.83391.09441.10460.96070.9492
LVGI 0.92510.97161.05441.16720.98130.92860.89821.10141.02991.1745
TATA -0.1222-0.1175-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811-0.0603
M-score -2.97-2.72-3.22-2.93-2.64-3.05-2.77-3.41-2.82-2.92

STMicroelectronics NV Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.10141.14681.09481.17611.09691.16551.06670.96030.9480.9468
GMI 1.12031.03951.01741.02671.01311.01361.04231.00831.00581.0153
AQI 0.64840.68840.62230.81040.94850.92741.74930.8561.10251.0383
SGI 0.87230.92050.95260.96550.95160.93080.92070.92230.91610.9223
DEPI 1.01961.011.07451.18211.22641.25271.08140.88420.83890.8097
SGAI 1.10471.02071.00010.99180.96070.96070.94560.93530.96460.9999
LVGI 1.10141.05730.97290.85711.02991.05840.89221.29311.17451.2462
TATA -0.1676-0.161-0.1652-0.1003-0.0612-0.0451-0.0435-0.0517-0.0527-0.0666
M-score -3.41-3.30-3.33-2.81-2.71-2.61-2.31-2.98-2.87-2.99
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