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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-3.14 (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.

Seagate Technology PLC has a M-score of -3.14 suggests that the company is not a manipulator.

STX' s Beneish M-Score Range Over the Past 10 Years
Min: -5.75   Max: 0.3
Current: -3.14

-5.75
0.3

During the past 13 years, the highest Beneish M-Score of Seagate Technology PLC was 0.30. The lowest was -5.75. And the median was -2.73.


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 Seagate Technology PLC 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 * 0.8912+0.528 * 1.075+0.404 * 1.5982+0.892 * 0.8577+0.115 * 1.0393
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1347+4.679 * -0.1334-0.327 * 1.2163
=-3.14

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,398 Mil.
Revenue was 2986 + 2925 + 2928 + 3330 = $12,169 Mil.
Gross Profit was 741 + 689 + 776 + 955 = $3,161 Mil.
Total Current Assets was $3,931 Mil.
Total Assets was $8,796 Mil.
Property, Plant and Equipment(Net PPE) was $2,230 Mil.
Depreciation, Depletion and Amortization(DDA) was $832 Mil.
Selling, General & Admin. Expense(SGA) was $764 Mil.
Total Current Liabilities was $2,539 Mil.
Long-Term Debt was $4,140 Mil.
Net Income was 165 + 34 + 137 + 291 = $627 Mil.
Non Operating Income was -2 + -9 + -5 + 8 = $-8 Mil.
Cash Flow from Operations was 382 + 824 + 228 + 374 = $1,808 Mil.
Accounts Receivable was $1,829 Mil.
Revenue was 3696 + 3785 + 3301 + 3406 = $14,188 Mil.
Gross Profit was 1027 + 1051 + 925 + 959 = $3,962 Mil.
Total Current Assets was $6,632 Mil.
Total Assets was $10,814 Mil.
Property, Plant and Equipment(Net PPE) was $2,155 Mil.
Depreciation, Depletion and Amortization(DDA) was $848 Mil.
Selling, General & Admin. Expense(SGA) was $785 Mil.
Total Current Liabilities was $2,819 Mil.
Long-Term Debt was $3,932 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)
=(1398 / 12169) / (1829 / 14188)
=0.11488208 / 0.12891176
=0.8912

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)
=(689 / 14188) / (741 / 12169)
=0.27925007 / 0.2597584
=1.075

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 - (3931 + 2230) / 8796) / (1 - (6632 + 2155) / 10814)
=0.29956799 / 0.1874422
=1.5982

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
=12169 / 14188
=0.8577

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))
=(848 / (848 + 2155)) / (832 / (832 + 2230))
=0.28238428 / 0.27171783
=1.0393

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)
=(764 / 12169) / (785 / 14188)
=0.06278248 / 0.05532845
=1.1347

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)
=((4140 + 2539) / 8796) / ((3932 + 2819) / 10814)
=0.75932242 / 0.62428334
=1.2163

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
=(627 - -8 - 1808) / 8796
=-0.1334

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.

Seagate Technology PLC has a M-score of -3.14 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.

Seagate Technology PLC Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.08370.77560.91140.94951.16621.10911.13920.74961.08261.0024
GMI 0.95421.20690.76261.75380.51141.43750.62391.1420.97971.0108
AQI 8.00971.10110.93350.2380.86240.87662.48681.12950.98441.2206
SGI 1.21891.2341.11870.77161.16220.96281.36170.96060.95631.0011
DEPI 1.0340.82791.0660.8661.14941.01950.95690.94570.9531.0812
SGAI 1.19851.06781.00021.05610.70021.05770.87141.25191.1891.1857
LVGI 0.86851.11021.05881.47490.86771.10930.89060.94071.14250.9916
TATA -0.067-0.0048-0.1283-0.5538-0.0388-0.0795-0.0403-0.125-0.1006-0.1034
M-score 0.30-2.42-3.22-5.41-2.57-2.65-1.76-3.23-3.02-2.89

Seagate Technology PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.08011.14591.16331.08261.18721.11491.06291.00240.86790.8912
GMI 1.19931.15051.04420.97980.97660.98690.99391.01081.04521.075
AQI 1.02090.96760.97130.98441.26471.13131.20961.22061.03521.5982
SGI 0.88950.85520.89870.95640.99381.01581.01911.00110.91860.8577
DEPI 0.9460.94560.92250.9531.00611.05261.08351.08121.0641.0393
SGAI 1.30671.46831.37741.18891.14371.07781.08081.18431.18211.1347
LVGI 0.95841.08621.12931.14251.15960.92050.9880.99161.15161.2163
TATA -0.0891-0.1078-0.0832-0.1006-0.0931-0.0987-0.1109-0.1035-0.1751-0.1334
M-score -2.85-3.03-2.91-3.02-2.73-2.76-2.84-2.89-3.53-3.14
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