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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

STX' s 10-Year Beneish M-Score Range
Min: -5.75   Max: 0.3
Current: -2.76

-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 -2.68.


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 * 1.1149+0.528 * 0.9869+0.404 * 1.1313+0.892 * 1.0158+0.115 * 1.0526
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0778+4.679 * -0.0987-0.327 * 0.9205
=-2.76

* 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 $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.
Net Income was 933 + 381 + 320 + 395 = $2,029 Mil.
Non Operating Income was 122 + -11 + -77 + -3 = $31 Mil.
Cash Flow from Operations was 1443 + 602 + 577 + 443 = $3,065 Mil.
Accounts Receivable was $1,615 Mil.
Revenue was 3528 + 3489 + 3424 + 3526 = $13,967 Mil.
Gross Profit was 987 + 975 + 939 + 948 = $3,849 Mil.
Total Current Assets was $5,289 Mil.
Total Assets was $8,890 Mil.
Property, Plant and Equipment(Net PPE) was $2,128 Mil.
Depreciation, Depletion and Amortization(DDA) was $900 Mil.
Selling, General & Admin. Expense(SGA) was $717 Mil.
Total Current Liabilities was $2,457 Mil.
Long-Term Debt was $3,572 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)
=(1829 / 14188) / (1615 / 13967)
=0.12891176 / 0.1156297
=1.1149

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)
=(1051 / 13967) / (1027 / 14188)
=0.27557815 / 0.27925007
=0.9869

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 - (6632 + 2155) / 10814) / (1 - (5289 + 2128) / 8890)
=0.1874422 / 0.16569179
=1.1313

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
=14188 / 13967
=1.0158

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))
=(900 / (900 + 2128)) / (848 / (848 + 2155))
=0.29722589 / 0.28238428
=1.0526

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)
=(785 / 14188) / (717 / 13967)
=0.05532845 / 0.05133529
=1.0778

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)
=((3932 + 2819) / 10814) / ((3572 + 2457) / 8890)
=0.62428334 / 0.67817773
=0.9205

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
=(2029 - 31 - 3065) / 10814
=-0.0987

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 -2.76 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.81230.71690.54470.74961.08011.14591.16331.08261.18721.1149
GMI 0.59070.71650.96781.1421.19931.15051.04420.97980.97660.9869
AQI 2.57921.00611.13821.12951.02090.96760.97130.98441.26471.1313
SGI 1.43081.41281.15720.96060.88950.85520.89870.95640.99381.0158
DEPI 0.93030.89970.95230.94570.9460.94560.92250.9531.00611.0526
SGAI 0.89990.8350.99981.25191.30671.46831.37741.18891.14371.0778
LVGI 0.86431.0810.9710.94070.95841.08621.12931.14251.15960.9205
TATA -0.1032-0.1335-0.189-0.1251-0.0891-0.1078-0.0832-0.1006-0.0931-0.0987
M-score -2.28-3.15-3.60-3.23-2.85-3.03-2.91-3.02-2.73-2.76
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