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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.87 (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 -2.86 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: -2.87

-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 -2.87.


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 * 1.0619+0.528 * 1.0403+0.404 * 1.123+0.892 * 0.9608+0.115 * 0.9668
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0662+4.679 * -0.1007-0.327 * 0.9517
=-2.86

* 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 $1,009 Mil.
Revenue was 1797 + 1703 + 1613 + 1668 = $6,781 Mil.
Gross Profit was 643 + 471 + 538 + 558 = $2,210 Mil.
Total Current Assets was $4,725 Mil.
Total Assets was $8,278 Mil.
Property, Plant and Equipment(Net PPE) was $2,289 Mil.
Depreciation, Depletion and Amortization(DDA) was $729 Mil.
Selling, General & Admin. Expense(SGA) was $924 Mil.
Total Current Liabilities was $1,676 Mil.
Long-Term Debt was $1,436 Mil.
Net Income was 71 + 50 + -41 + 2 = $82 Mil.
Non Operating Income was -1 + 9 + 0 + 1 = $9 Mil.
Cash Flow from Operations was 198 + 323 + 141 + 245 = $907 Mil.
Accounts Receivable was $989 Mil.
Revenue was 1764 + 1760 + 1705 + 1829 = $7,058 Mil.
Gross Profit was 613 + 595 + 566 + 619 = $2,393 Mil.
Total Current Assets was $5,073 Mil.
Total Assets was $8,686 Mil.
Property, Plant and Equipment(Net PPE) was $2,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $741 Mil.
Selling, General & Admin. Expense(SGA) was $902 Mil.
Total Current Liabilities was $1,874 Mil.
Long-Term Debt was $1,557 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)
=(1009 / 6781) / (989 / 7058)
=0.14879811 / 0.14012468
=1.0619

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)
=(2393 / 7058) / (2210 / 6781)
=0.33904789 / 0.32591063
=1.0403

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 - (4725 + 2289) / 8278) / (1 - (5073 + 2432) / 8686)
=0.15269389 / 0.13596592
=1.123

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
=6781 / 7058
=0.9608

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 + 2432)) / (729 / (729 + 2289))
=0.23353293 / 0.2415507
=0.9668

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)
=(924 / 6781) / (902 / 7058)
=0.13626309 / 0.12779824
=1.0662

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)
=((1436 + 1676) / 8278) / ((1557 + 1874) / 8686)
=0.37593622 / 0.39500345
=0.9517

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
=(82 - 9 - 907) / 8278
=-0.1007

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 -2.86 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.

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 1.59121.31362.4060.8960.8561.05930.64841.63140.63941.6891
SGI 1.10941.01490.98410.86471.21570.94090.87240.95160.91610.9315
DEPI 1.10410.9930.9780.89171.06960.95361.01961.07940.95310.9757
SGAI 0.93741.01491.09751.12920.83391.09441.10460.96070.94921.0388
LVGI 0.97161.05441.16720.98130.92860.89821.10140.93071.29870.8721
TATA -0.1199-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0733-0.0603-0.0808
M-score -2.73-3.22-2.93-2.64-3.05-2.77-3.41-2.48-3.15-2.64

STMicroelectronics NV Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.06670.96030.9480.94680.96221.01680.96630.98220.9591.0619
GMI 0.99440.96190.95870.96720.97680.98740.99780.99951.04591.0403
AQI 1.74930.8561.09961.03830.99491.11271.68911.03371.02471.123
SGI 0.92070.92230.91610.92230.93040.92990.93150.93420.93980.9608
DEPI 1.041.09611.04921.02141.08360.90080.88670.89960.78980.9668
SGAI 0.93110.92060.94920.98391.01141.03191.03881.05061.07341.0662
LVGI 0.89221.29311.17361.24621.29831.05490.87210.92680.89730.9517
TATA -0.0239-0.0115-0.039-0.0523-0.0673-0.0897-0.0808-0.0891-0.0922-0.1007
M-score -2.25-2.79-2.81-2.92-3.00-2.94-2.65-2.95-2.97-2.86
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