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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.37 (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 -2.51 suggests that the company is not a manipulator.

STM' s 10-Year Beneish M-Score Range
Min: -3.56   Max: -2
Current: -2.37

-3.56
-2

During the past 13 years, the highest Beneish M-Score of STMicroelectronics NV was -2.00. The lowest was -3.56. And the median was -2.76.


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 * 1.8893+0.528 * 0.9498+0.404 * 1.1025+0.892 * 0.4597+0.115 * 0.8389
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9429+4.679 * -0.0683-0.327 * 1.1745
=-2.51

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $911 Mil.
Revenue was 1829 + 1886 + 0 + 0 = $3,715 Mil.
Gross Profit was 619 + 646 + 0 + 0 = $1,265 Mil.
Total Current Assets was $5,051 Mil.
Total Assets was $9,008 Mil.
Property, Plant and Equipment(Net PPE) was $2,647 Mil.
Depreciation, Depletion and Amortization(DDA) was $811 Mil.
Selling, General & Admin. Expense(SGA) was $462 Mil.
Total Current Liabilities was $1,766 Mil.
Long-Term Debt was $1,603 Mil.
Net Income was 43 + 72 + 0 + 0 = $115 Mil.
Non Operating Income was 15 + 0 + 0 + 0 = $15 Mil.
Cash Flow from Operations was 311 + 89 + 262 + 53 = $715 Mil.
Accounts Receivable was $1,049 Mil.
Revenue was 2015 + 2013 + 2045 + 2009 = $8,082 Mil.
Gross Profit was 662 + 652 + 672 + 628 = $2,614 Mil.
Total Current Assets was $4,807 Mil.
Total Assets was $9,173 Mil.
Property, Plant and Equipment(Net PPE) was $3,156 Mil.
Depreciation, Depletion and Amortization(DDA) was $773 Mil.
Selling, General & Admin. Expense(SGA) was $1,066 Mil.
Total Current Liabilities was $1,993 Mil.
Long-Term Debt was $928 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)
=(911 / 3715) / (1049 / 8082)
=0.24522207 / 0.12979461
=1.8893

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)
=(646 / 8082) / (619 / 3715)
=0.32343479 / 0.34051144
=0.9498

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 - (5051 + 2647) / 9008) / (1 - (4807 + 3156) / 9173)
=0.14542629 / 0.13190886
=1.1025

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
=3715 / 8082
=0.4597

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))
=(773 / (773 + 3156)) / (811 / (811 + 2647))
=0.19674217 / 0.23452863
=0.8389

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)
=(462 / 3715) / (1066 / 8082)
=0.1243607 / 0.13189805
=0.9429

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)
=((1603 + 1766) / 9008) / ((928 + 1993) / 9173)
=0.37400089 / 0.31843454
=1.1745

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
=(115 - 15 - 715) / 9008
=-0.0683

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 -2.51 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.04370.96120.99520.67361.48590.74010.90381.10131.09690.948
GMI 1.07770.95641.01120.97751.17220.79521.0571.12041.01310.9587
AQI 0.9911.59121.31362.4060.8960.8561.05930.64840.94851.1025
SGI 1.01391.10941.01490.98410.86471.21570.94090.87240.95160.9161
DEPI 0.83531.10410.9930.9780.89171.06960.95361.01961.07810.9543
SGAI 1.06850.93741.01491.09751.12920.83391.09441.10460.96070.9492
LVGI 0.92510.97161.05441.16720.98130.92860.89821.10141.02991.1745
TATA -0.1222-0.1175-0.1845-0.1317-0.1073-0.0885-0.0451-0.1676-0.0811-0.0603
M-score -2.97-2.72-3.22-2.93-2.64-3.05-2.77-3.41-2.82-2.92

STMicroelectronics NV Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.04821.10141.14681.09481.17611.09691.51582.04371.86831.8893
GMI 1.15711.12031.03951.01741.02671.01311.01451.00610.96040.9499
AQI 0.86670.64840.68840.62230.81040.94850.92741.74930.8561.1025
SGI 0.82130.87230.92050.95260.96550.95160.71570.48060.47410.4597
DEPI 0.96671.01961.011.07451.18211.22641.25271.08140.88420.8389
SGAI 1.13411.10471.02071.00010.99180.96070.96880.92610.90510.9429
LVGI 1.09871.10141.05730.97290.85711.02991.05840.89221.29311.1745
TATA -0.1144-0.1676-0.161-0.1652-0.1003-0.0612-0.0433-0.0575-0.0666-0.0683
M-score -3.16-3.41-3.30-3.33-2.81-2.71-2.47-1.89-2.63-2.51
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