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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-3.02 (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 -3.02 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: -3.02

-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 -2.76.


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 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 * 1.0025+0.528 * 1.0824+0.404 * 1.3559+0.892 * 0.8566+0.115 * 0.9702
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8649+4.679 * -0.1289-0.327 * 1.0441
=-3.02

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,307 Mil.
Revenue was 2797 + 2654 + 2595 + 2986 = $11,032 Mil.
Gross Profit was 801 + 662 + 524 + 741 = $2,728 Mil.
Total Current Assets was $3,928 Mil.
Total Assets was $8,495 Mil.
Property, Plant and Equipment(Net PPE) was $2,093 Mil.
Depreciation, Depletion and Amortization(DDA) was $807 Mil.
Selling, General & Admin. Expense(SGA) was $609 Mil.
Total Current Liabilities was $2,608 Mil.
Long-Term Debt was $4,092 Mil.
Net Income was 167 + 70 + -21 + 165 = $381 Mil.
Non Operating Income was 1 + 1 + 28 + -2 = $28 Mil.
Cash Flow from Operations was 592 + 269 + 205 + 382 = $1,448 Mil.
Accounts Receivable was $1,522 Mil.
Revenue was 2925 + 2928 + 3330 + 3696 = $12,879 Mil.
Gross Profit was 689 + 776 + 955 + 1027 = $3,447 Mil.
Total Current Assets was $4,882 Mil.
Total Assets was $9,079 Mil.
Property, Plant and Equipment(Net PPE) was $2,247 Mil.
Depreciation, Depletion and Amortization(DDA) was $831 Mil.
Selling, General & Admin. Expense(SGA) was $822 Mil.
Total Current Liabilities was $2,718 Mil.
Long-Term Debt was $4,140 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)
=(1307 / 11032) / (1522 / 12879)
=0.11847353 / 0.11817688
=1.0025

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)
=(3447 / 12879) / (2728 / 11032)
=0.267645 / 0.24728064
=1.0824

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 - (3928 + 2093) / 8495) / (1 - (4882 + 2247) / 9079)
=0.29123014 / 0.21478136
=1.3559

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
=11032 / 12879
=0.8566

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))
=(831 / (831 + 2247)) / (807 / (807 + 2093))
=0.26998051 / 0.27827586
=0.9702

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)
=(609 / 11032) / (822 / 12879)
=0.05520305 / 0.06382483
=0.8649

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)
=((4092 + 2608) / 8495) / ((4140 + 2718) / 9079)
=0.78869923 / 0.75536953
=1.0441

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
=(381 - 28 - 1448) / 8495
=-0.1289

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 -3.02 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 local exchange's currency.

Seagate Technology PLC Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.77560.91140.94951.16621.10911.13920.74961.08261.00240.9352
GMI 1.20690.76261.75380.51141.43750.62391.1420.97971.01081.1832
AQI 1.10110.93350.2380.86240.87662.48681.12950.98441.22061.5273
SGI 1.2341.11870.77161.16220.96281.36170.96060.95631.00110.8123
DEPI 0.82791.0660.8661.14941.01950.95690.94570.9531.08120.9843
SGAI 1.06781.00021.05610.70021.05770.87141.25191.1891.18570.9122
LVGI 1.11021.05881.47490.86771.10930.89060.94071.14250.99161.1712
TATA -0.0048-0.1283-0.5538-0.0388-0.0795-0.0403-0.125-0.1006-0.1034-0.1758
M-score -2.42-3.22-5.41-2.57-2.65-1.76-3.23-3.02-2.89-3.26

Seagate Technology PLC Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.08261.18721.11491.06291.00240.86790.89120.87210.93521.0025
GMI 0.97980.97660.98690.99391.01081.04521.0751.17471.18271.0824
AQI 0.98441.26471.13131.20961.22061.03521.59821.54561.52731.3559
SGI 0.95640.99381.01581.01911.00110.91860.85770.81020.81230.8566
DEPI 0.9531.00611.05261.08351.08121.0641.03931.00560.98430.9702
SGAI 1.18891.14371.07781.08081.18431.18211.13471.05380.91470.8649
LVGI 1.14251.15960.92050.9880.99161.15161.21631.1781.17121.0441
TATA -0.1006-0.0931-0.0987-0.1109-0.1035-0.1751-0.1334-0.1595-0.1757-0.1289
M-score -3.02-2.73-2.76-2.84-2.89-3.53-3.14-3.27-3.26-3.02
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