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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-1.74 (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 -2.90 suggests that the company is not a manipulator.

STM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.56   Max: -1.7
Current: -1.74

-3.56
-1.7

During the past 13 years, the highest Beneish M-Score of STMicroelectronics NV was -1.70. The lowest was -3.56. And the median was -2.85.


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 * 1.0168+0.528 * 1.0605+0.404 * 1.1127+0.892 * 0.9299+0.115 * 0.9018
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0399+4.679 * -0.0886-0.327 * 1.0549
=-2.90

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $989 Mil.
Revenue was 1764 + 3465 + 0 + 1829 = $7,058 Mil.
Gross Profit was 613 + 996 + 0 + 619 = $2,228 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 $909 Mil.
Total Current Liabilities was $1,874 Mil.
Long-Term Debt was $1,557 Mil.
Net Income was 90 + 31 + 0 + 43 = $164 Mil.
Non Operating Income was -1 + 12 + 0 + 15 = $26 Mil.
Cash Flow from Operations was 57 + 391 + 149 + 311 = $908 Mil.
Accounts Receivable was $1,046 Mil.
Revenue was 1886 + 1864 + 1825 + 2015 = $7,590 Mil.
Gross Profit was 646 + 634 + 599 + 662 = $2,541 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 $743 Mil.
Selling, General & Admin. Expense(SGA) was $940 Mil.
Total Current Liabilities was $1,781 Mil.
Long-Term Debt was $1,743 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)
=(989 / 7058) / (1046 / 7590)
=0.14012468 / 0.13781291
=1.0168

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)
=(996 / 7590) / (613 / 7058)
=0.33478261 / 0.31567016
=1.0605

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 - (5073 + 2432) / 8686) / (1 - (5476 + 2785) / 9411)
=0.13596592 / 0.12219743
=1.1127

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
=7058 / 7590
=0.9299

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))
=(743 / (743 + 2785)) / (741 / (741 + 2432))
=0.21060091 / 0.23353293
=0.9018

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)
=(909 / 7058) / (940 / 7590)
=0.12879003 / 0.12384717
=1.0399

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)
=((1557 + 1874) / 8686) / ((1743 + 1781) / 9411)
=0.39500345 / 0.37445542
=1.0549

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
=(164 - 26 - 908) / 8686
=-0.0886

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 -2.90 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 0.96120.99520.67361.48590.74010.90381.10131.09690.948
GMI 0.95641.01120.97751.17220.79521.0571.12041.01310.9587
AQI 1.59121.31362.4060.8960.8561.05930.64840.94851.1025
SGI 1.10941.01490.98410.86471.21570.94090.87240.95160.9161
DEPI 1.10410.9930.9780.89171.06960.95361.01961.07810.9543
SGAI 0.93741.01491.09751.12920.83391.09441.10460.96070.9492
LVGI 0.97161.05441.16720.98130.92860.89821.10141.02991.1745
TATA -0.1175-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811-0.0603
M-score -2.72-3.22-2.93-2.64-3.05-2.77-3.41-2.82-2.92

STMicroelectronics NV Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.17611.09691.16551.06670.96030.9481.23620.96221.01680.9663
GMI 1.02671.01311.01360.99440.96190.95870.96161.04811.06051.0733
AQI 0.81040.94850.92741.74930.8561.10251.03830.99491.11271.0024
SGI 0.96550.95160.93080.92070.92230.91610.70640.93040.92990.9315
DEPI 1.18211.22641.25271.19130.97030.92310.89390.85780.90181.1259
SGAI 0.99180.96070.96070.93110.92060.94920.97491.01921.03991.0469
LVGI 0.85711.02991.05840.89221.29311.17451.24621.29831.05490.9718
TATA -0.1003-0.0612-0.0451-0.031-0.0386-0.039-0.0494-0.0835-0.0886-0.0593
M-score -2.81-2.71-2.61-2.27-2.93-2.82-2.85-3.06-2.90-2.79
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