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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-1.93 (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 -1.92 signals that the company is a manipulator.

STM' s 10-Year Beneish M-Score Range
Min: -3.53   Max: -1.9
Current: -1.93

-3.53
-1.9

During the past 13 years, the highest Beneish M-Score of STMicroelectronics NV was -1.90. The lowest was -3.53. And the median was -2.96.


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 * 1.6594+0.528 * 1.0423+0.404 * 1.7493+0.892 * 0.9207+0.115 * 0.8156
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9456+4.679 * -0.0686-0.327 * 0.8922
=-1.92

* 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 $1,708 Mil.
Revenue was 1864 + 1825 + 2015 + 2013 = $7,717 Mil.
Gross Profit was 517 + 599 + 662 + 652 = $2,430 Mil.
Total Current Assets was $4,622 Mil.
Total Assets was $9,986 Mil.
Property, Plant and Equipment(Net PPE) was $2,971 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,193 Mil.
Selling, General & Admin. Expense(SGA) was $982 Mil.
Total Current Liabilities was $1,961 Mil.
Long-Term Debt was $905 Mil.
Net Income was 95 + -24 + -36 + -142 = $-107 Mil.
Non Operating Income was -62 + -7 + -11 + -8 = $-88 Mil.
Cash Flow from Operations was 262 + 53 + 351 + 0 = $666 Mil.
Accounts Receivable was $1,118 Mil.
Revenue was 2045 + 2009 + 2162 + 2166 = $8,382 Mil.
Gross Profit was 672 + 628 + 698 + 753 = $2,751 Mil.
Total Current Assets was $5,046 Mil.
Total Assets was $9,643 Mil.
Property, Plant and Equipment(Net PPE) was $3,276 Mil.
Depreciation, Depletion and Amortization(DDA) was $999 Mil.
Selling, General & Admin. Expense(SGA) was $1,128 Mil.
Total Current Liabilities was $2,451 Mil.
Long-Term Debt was $651 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)
=(1708 / 7717) / (1118 / 8382)
=0.22132953 / 0.13338105
=1.6594

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)
=(599 / 8382) / (517 / 7717)
=0.32820329 / 0.31488921
=1.0423

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 - (4622 + 2971) / 9986) / (1 - (5046 + 3276) / 9643)
=0.23963549 / 0.13699056
=1.7493

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
=7717 / 8382
=0.9207

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))
=(999 / (999 + 3276)) / (1193 / (1193 + 2971))
=0.23368421 / 0.28650336
=0.8156

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)
=(982 / 7717) / (1128 / 8382)
=0.12725152 / 0.13457409
=0.9456

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)
=((905 + 1961) / 9986) / ((651 + 2451) / 9643)
=0.2870018 / 0.32168412
=0.8922

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
=(-107 - -88 - 666) / 9986
=-0.0686

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 -1.92 signals that the company is likely to 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 0.80881.02150.93861.01840.86271.40180.71350.60451.66890.8652
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 1.00820.83531.10410.98320.98770.89171.06960.94821.02531.0781
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 -0.1263-0.1222-0.1175-0.1843-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811
M-score -3.04-2.99-2.74-3.20-2.75-2.71-3.07-3.04-2.89-3.03

STMicroelectronics NV Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.5810.62920.69271.66911.70731.09481.17610.86520.78291.6594
GMI 1.08861.171.15711.12031.03951.01741.02671.01311.01361.0423
AQI 1.09521.1460.86670.64120.68840.62230.81040.94850.92741.7493
SGI 0.87320.83070.82130.87230.92050.95260.96550.95160.93080.9207
DEPI 1.07040.80050.96671.02531.011.07451.29370.90520.91430.8156
SGAI 1.14611.16831.13411.10471.02071.00010.99180.96070.96070.9456
LVGI 0.91961.01521.09871.10141.05730.97290.85711.02991.05840.8922
TATA -0.0654-0.0695-0.1143-0.1675-0.1609-0.1651-0.1185-0.0885-0.073-0.0686
M-score -3.19-3.21-3.49-2.89-2.78-3.33-2.88-3.09-3.13-1.92
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