Switch to:
STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.52 (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 -2.62 suggests that the company is not a manipulator.

STM' s 10-Year Beneish M-Score Range
Min: -3.56   Max: -1.85
Current: -2.52

-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 -2.87.


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 * 1.8683+0.528 * 0.9604+0.404 * 0.856+0.892 * 0.4741+0.115 * 0.9979
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9051+4.679 * -0.0666-0.327 * 1.2931
=-2.62

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,046 Mil.
Revenue was 1886 + 0 + 0 + 2015 = $3,901 Mil.
Gross Profit was 646 + 0 + 0 + 662 = $1,308 Mil.
Total Current Assets was $5,476 Mil.
Total Assets was $9,411 Mil.
Property, Plant and Equipment(Net PPE) was $2,785 Mil.
Depreciation, Depletion and Amortization(DDA) was $837 Mil.
Selling, General & Admin. Expense(SGA) was $475 Mil.
Total Current Liabilities was $1,781 Mil.
Long-Term Debt was $1,743 Mil.
Net Income was 72 + 0 + 0 + -36 = $36 Mil.
Non Operating Income was 0 + 0 + 0 + -11 = $-11 Mil.
Cash Flow from Operations was 89 + 262 + 53 + 270 = $674 Mil.
Accounts Receivable was $1,181 Mil.
Revenue was 2013 + 2045 + 2009 + 2162 = $8,229 Mil.
Gross Profit was 652 + 672 + 628 + 698 = $2,650 Mil.
Total Current Assets was $4,800 Mil.
Total Assets was $9,324 Mil.
Property, Plant and Equipment(Net PPE) was $3,193 Mil.
Depreciation, Depletion and Amortization(DDA) was $957 Mil.
Selling, General & Admin. Expense(SGA) was $1,107 Mil.
Total Current Liabilities was $2,081 Mil.
Long-Term Debt was $619 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)
=(1046 / 3901) / (1181 / 8229)
=0.26813638 / 0.14351683
=1.8683

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)
=(0 / 8229) / (646 / 3901)
=0.32203184 / 0.33529864
=0.9604

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 - (5476 + 2785) / 9411) / (1 - (4800 + 3193) / 9324)
=0.12219743 / 0.14274989
=0.856

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
=3901 / 8229
=0.4741

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))
=(957 / (957 + 3193)) / (837 / (837 + 2785))
=0.23060241 / 0.2310878
=0.9979

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)
=(475 / 3901) / (1107 / 8229)
=0.12176365 / 0.13452424
=0.9051

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)
=((1743 + 1781) / 9411) / ((619 + 2081) / 9324)
=0.37445542 / 0.28957529
=1.2931

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
=(36 - -11 - 674) / 9411
=-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 -2.62 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.91461.04370.96120.99520.67361.48590.74010.90381.10131.0969
GMI 0.96211.07770.95641.01120.97751.17220.79521.0571.12041.0131
AQI 0.970.9911.59121.31362.4060.8960.8561.07110.64120.9485
SGI 1.21031.01391.10941.01490.98410.86471.21570.94090.87240.9516
DEPI 1.00820.83531.10410.9930.9780.89171.06960.94821.02531.0781
SGAI 0.99681.06850.93741.01491.09751.12920.83391.09441.10460.9607
LVGI 0.83230.92510.97161.05441.16720.98130.92860.89821.10141.0299
TATA -0.1263-0.1222-0.1175-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811
M-score -2.94-2.97-2.72-3.22-2.93-2.64-3.05-2.76-3.41-2.82

STMicroelectronics NV Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99111.04821.10141.14681.09481.17611.09691.51582.04371.8683
GMI 1.171.15711.12031.03951.01741.02671.01311.01451.00610.9604
AQI 1.1460.86670.64120.68840.62230.81040.94850.92741.74930.856
SGI 0.83070.82130.87230.92050.95260.96550.95160.71570.48060.4741
DEPI 0.80050.96671.02531.011.07451.04751.07811.09530.95990.9979
SGAI 1.16831.13411.10471.02071.00010.99180.96070.96880.92610.9051
LVGI 1.01521.09871.10141.05730.97290.85711.02991.05840.89221.2931
TATA -0.0695-0.1143-0.1675-0.1609-0.1651-0.1201-0.0813-0.0638-0.076-0.0666
M-score -2.87-3.16-3.41-3.29-3.33-2.92-2.82-2.58-1.99-2.62
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK