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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

STX' s 10-Year Beneish M-Score Range
Min: -5.75   Max: 0.3
Current: -2.84

-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 -2.70.


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 * 1.0629+0.528 * 0.9939+0.404 * 1.2096+0.892 * 1.0191+0.115 * 1.0835
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0808+4.679 * -0.1109-0.327 * 0.988
=-2.84

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,769 Mil.
Revenue was 3330 + 3696 + 3785 + 3301 = $14,112 Mil.
Gross Profit was 955 + 1027 + 1051 + 925 = $3,958 Mil.
Total Current Assets was $5,831 Mil.
Total Assets was $10,036 Mil.
Property, Plant and Equipment(Net PPE) was $2,182 Mil.
Depreciation, Depletion and Amortization(DDA) was $840 Mil.
Selling, General & Admin. Expense(SGA) was $814 Mil.
Total Current Liabilities was $3,043 Mil.
Long-Term Debt was $3,457 Mil.
Net Income was 291 + 933 + 381 + 320 = $1,925 Mil.
Non Operating Income was 8 + 122 + -11 + -77 = $42 Mil.
Cash Flow from Operations was 374 + 1443 + 602 + 577 = $2,996 Mil.
Accounts Receivable was $1,633 Mil.
Revenue was 3406 + 3528 + 3489 + 3424 = $13,847 Mil.
Gross Profit was 959 + 987 + 975 + 939 = $3,860 Mil.
Total Current Assets was $5,151 Mil.
Total Assets was $8,659 Mil.
Property, Plant and Equipment(Net PPE) was $2,065 Mil.
Depreciation, Depletion and Amortization(DDA) was $890 Mil.
Selling, General & Admin. Expense(SGA) was $739 Mil.
Total Current Liabilities was $2,162 Mil.
Long-Term Debt was $3,514 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)
=(1769 / 14112) / (1633 / 13847)
=0.12535431 / 0.11793168
=1.0629

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)
=(1027 / 13847) / (955 / 14112)
=0.27876074 / 0.28047052
=0.9939

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 - (5831 + 2182) / 10036) / (1 - (5151 + 2065) / 8659)
=0.20157433 / 0.16664742
=1.2096

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
=14112 / 13847
=1.0191

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))
=(890 / (890 + 2065)) / (840 / (840 + 2182))
=0.30118443 / 0.27796161
=1.0835

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)
=(814 / 14112) / (739 / 13847)
=0.05768141 / 0.05336896
=1.0808

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)
=((3457 + 3043) / 10036) / ((3514 + 2162) / 8659)
=0.64766839 / 0.65550294
=0.988

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
=(1925 - 42 - 2996) / 10036
=-0.1109

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 -2.84 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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.30651.08370.77560.91140.94951.16621.10911.13920.74961.0826
GMI 1.05830.95421.20690.76261.75380.51141.43750.62391.1420.9797
AQI 0.88958.00971.10110.93350.2380.86240.87662.48681.12950.9844
SGI 1.21351.21891.2341.11870.77161.16220.96281.36170.96060.9563
DEPI 1.03691.0340.82791.0660.8661.14941.01950.95690.94570.953
SGAI 0.86951.19851.06781.00021.05610.70021.05770.87141.25191.189
LVGI 0.95180.86851.11021.05881.47490.86771.10930.89060.94071.1425
TATA -0.1417-0.067-0.0048-0.1283-0.5538-0.0388-0.0795-0.0403-0.125-0.1006
M-score -2.640.30-2.42-3.22-5.41-2.57-2.65-1.76-3.23-3.02

Seagate Technology PLC Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.71690.54470.74961.08011.14591.16331.08261.18721.11491.0629
GMI 0.71650.96781.1421.19931.15051.04420.97980.97660.98690.9939
AQI 1.00611.13821.12951.02090.96760.97130.98441.26471.13131.2096
SGI 1.41281.15720.96060.88950.85520.89870.95640.99381.01581.0191
DEPI 0.89970.95230.94570.9460.94560.92250.9531.00611.05261.0835
SGAI 0.8350.99981.25191.30671.46831.37741.18891.14371.07781.0808
LVGI 1.0810.9710.94070.95841.08621.12931.14251.15960.92050.988
TATA -0.1335-0.189-0.1251-0.0891-0.1078-0.0832-0.1006-0.0931-0.0987-0.1109
M-score -3.15-3.60-3.23-2.85-3.03-2.91-3.02-2.73-2.76-2.84
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