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STMicroelectronics NV (NYSE:STM)
Beneish M-Score
-2.83 (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 -3.01 suggests that the company is not a manipulator.

STM' s 10-Year Beneish M-Score Range
Min: -3.56   Max: -1.7
Current: -2.83

-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 -2.86.


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 * 1.2619+0.528 * 0.9715+0.404 * 0.9949+0.892 * 0.7095+0.115 * 0.8578
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0028+4.679 * -0.0817-0.327 * 1.2983
=-3.01

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $983 Mil.
Revenue was 1760 + 0 + 1829 + 1886 = $5,475 Mil.
Gross Profit was 595 + 0 + 619 + 646 = $1,860 Mil.
Total Current Assets was $4,968 Mil.
Total Assets was $9,836 Mil.
Property, Plant and Equipment(Net PPE) was $2,523 Mil.
Depreciation, Depletion and Amortization(DDA) was $748 Mil.
Selling, General & Admin. Expense(SGA) was $688 Mil.
Total Current Liabilities was $2,081 Mil.
Long-Term Debt was $1,584 Mil.
Net Income was 35 + 0 + 43 + 72 = $150 Mil.
Non Operating Income was -1 + 0 + 15 + 0 = $14 Mil.
Cash Flow from Operations was 391 + 149 + 311 + 89 = $940 Mil.
Accounts Receivable was $1,098 Mil.
Revenue was 1864 + 1825 + 2015 + 2013 = $7,717 Mil.
Gross Profit was 634 + 599 + 662 + 652 = $2,547 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 $725 Mil.
Selling, General & Admin. Expense(SGA) was $967 Mil.
Total Current Liabilities was $1,961 Mil.
Long-Term Debt was $905 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)
=(983 / 5475) / (1098 / 7717)
=0.17954338 / 0.14228327
=1.2619

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)
=(0 / 7717) / (595 / 5475)
=0.33005054 / 0.33972603
=0.9715

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 - (4968 + 2523) / 9836) / (1 - (4622 + 2971) / 9986)
=0.23840992 / 0.23963549
=0.9949

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
=5475 / 7717
=0.7095

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))
=(725 / (725 + 2971)) / (748 / (748 + 2523))
=0.19615801 / 0.22867625
=0.8578

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)
=(688 / 5475) / (967 / 7717)
=0.1256621 / 0.12530776
=1.0028

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)
=((1584 + 2081) / 9836) / ((905 + 1961) / 9986)
=0.37261082 / 0.2870018
=1.2983

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
=(150 - 14 - 940) / 9836
=-0.0817

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 -3.01 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.14681.09481.17611.09691.16551.06670.96030.9481.23621.2619
GMI 1.03951.01741.02671.01311.01360.99440.96190.95870.96160.9715
AQI 0.68840.62230.81040.94850.92741.74930.8561.10251.03830.9949
SGI 0.92050.95260.96550.95160.93080.92070.92230.91610.70640.7095
DEPI 1.011.07451.18211.22641.25271.19130.97030.92310.89390.8578
SGAI 1.02071.00010.99180.96070.96070.93110.92060.94920.97491.0028
LVGI 1.05730.97290.85711.02991.05840.89221.29311.17451.24621.2983
TATA -0.161-0.1652-0.1003-0.0612-0.0451-0.031-0.0386-0.039-0.0494-0.0817
M-score -3.30-3.33-2.81-2.71-2.61-2.27-2.93-2.82-2.85-3.01
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