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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.94 (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 -2.91 suggests that the company is not a manipulator.

STM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.59   Max: -1.8
Current: -2.94

-3.59
-1.8

During the past 13 years, the highest Beneish M-Score of STMicroelectronics NV was -1.80. The lowest was -3.59. 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 * 0.9822+0.528 * 1.0766+0.404 * 1.0337+0.892 * 0.9342+0.115 * 0.8996
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0588+4.679 * -0.0881-0.327 * 0.9268
=-2.91

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $891 Mil.
Revenue was 1613 + 1668 + 1764 + 1760 = $6,805 Mil.
Gross Profit was 538 + 558 + 613 + 430 = $2,139 Mil.
Total Current Assets was $4,800 Mil.
Total Assets was $8,381 Mil.
Property, Plant and Equipment(Net PPE) was $2,333 Mil.
Depreciation, Depletion and Amortization(DDA) was $745 Mil.
Selling, General & Admin. Expense(SGA) was $911 Mil.
Total Current Liabilities was $1,597 Mil.
Long-Term Debt was $1,428 Mil.
Net Income was -41 + 2 + 90 + 53 = $104 Mil.
Non Operating Income was 0 + 1 + -1 + 8 = $8 Mil.
Cash Flow from Operations was 141 + 245 + 57 + 391 = $834 Mil.
Accounts Receivable was $971 Mil.
Revenue was 1705 + 1829 + 1886 + 1864 = $7,284 Mil.
Gross Profit was 566 + 619 + 646 + 634 = $2,465 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 $687 Mil.
Selling, General & Admin. Expense(SGA) was $921 Mil.
Total Current Liabilities was $1,818 Mil.
Long-Term Debt was $1,575 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)
=(891 / 6805) / (971 / 7284)
=0.13093314 / 0.13330588
=0.9822

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)
=(558 / 7284) / (538 / 6805)
=0.33841296 / 0.3143277
=1.0766

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 - (4800 + 2333) / 8381) / (1 - (4989 + 2468) / 8712)
=0.14890824 / 0.14405418
=1.0337

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
=6805 / 7284
=0.9342

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))
=(687 / (687 + 2468)) / (745 / (745 + 2333))
=0.2177496 / 0.24204029
=0.8996

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)
=(911 / 6805) / (921 / 7284)
=0.13387215 / 0.12644152
=1.0588

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)
=((1428 + 1597) / 8381) / ((1575 + 1818) / 8712)
=0.36093545 / 0.38946281
=0.9268

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
=(104 - 8 - 834) / 8381
=-0.0881

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 -2.91 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.96120.99520.67361.48590.74010.90381.10131.09690.9480.9663
GMI 0.95641.01120.97751.17220.79521.0571.12041.01310.95870.9978
AQI 1.59121.31362.4060.8960.8561.05930.64840.94851.09961.0045
SGI 1.10941.01490.98410.86471.21570.94090.87240.95160.91610.9315
DEPI 1.10410.9930.9780.89171.06960.95361.01961.07810.95430.9741
SGAI 0.93741.01491.09751.12920.83391.09441.10460.96070.94921.0388
LVGI 0.97161.05441.16720.98130.92860.89821.10141.02991.17360.9733
TATA -0.1199-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811-0.0603-0.0903
M-score -2.73-3.22-2.93-2.64-3.05-2.77-3.41-2.82-2.92-2.99

STMicroelectronics NV Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.09691.16551.06670.96030.9480.94680.96221.01680.96630.9822
GMI 1.01311.01360.99440.96190.95870.96721.04811.06051.07381.0766
AQI 0.94850.92741.74930.8561.09961.03830.99491.11271.00451.0337
SGI 0.95160.93080.92070.92230.91610.92230.93040.92990.93150.9342
DEPI 1.0791.09621.041.09611.04921.02140.98260.90080.88530.8996
SGAI 0.96070.96070.93110.92060.94920.98391.01921.03991.04691.0588
LVGI 1.02991.05840.89221.29311.17361.24621.29831.05490.97330.9268
TATA -0.0534-0.0373-0.0239-0.0115-0.039-0.0523-0.0835-0.0886-0.0892-0.0881
M-score -2.69-2.59-2.25-2.79-2.81-2.92-3.05-2.90-2.96-2.91
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