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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

STX' s 10-Year Beneish M-Score Range
Min: -5.93   Max: 0.3
Current: -2.94

-5.93
0.3

During the past 13 years, the highest Beneish M-Score of Seagate Technology PLC was 0.30. The lowest was -5.93. And the median was -2.65.


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 * 1.2382+0.528 * 1.1505+0.404 * 0.9676+0.892 * 0.8552+0.115 * 0.9456
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4683+4.679 * -0.1078-0.327 * 1.0862
=-2.94

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,745 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.
Net Income was 428 + 427 + 348 + 416 = $1,619 Mil.
Non Operating Income was 46 + 1 + -95 + 16 = $-32 Mil.
Cash Flow from Operations was 856 + 682 + 388 + 683 = $2,609 Mil.
Accounts Receivable was $1,648 Mil.
Revenue was 3668 + 3732 + 4482 + 4450 = $16,332 Mil.
Gross Profit was 992 + 1061 + 1484 + 1641 = $5,178 Mil.
Total Current Assets was $5,017 Mil.
Total Assets was $8,742 Mil.
Property, Plant and Equipment(Net PPE) was $2,228 Mil.
Depreciation, Depletion and Amortization(DDA) was $871 Mil.
Selling, General & Admin. Expense(SGA) was $571 Mil.
Total Current Liabilities was $2,643 Mil.
Long-Term Debt was $2,815 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)
=(1745 / 13967) / (1648 / 16332)
=0.12493735 / 0.1009062
=1.2382

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)
=(975 / 16332) / (987 / 13967)
=0.31704629 / 0.27557815
=1.1505

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 - (5289 + 2128) / 8890) / (1 - (5017 + 2228) / 8742)
=0.16569179 / 0.17124228
=0.9676

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
=13967 / 16332
=0.8552

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))
=(871 / (871 + 2228)) / (900 / (900 + 2128))
=0.28105841 / 0.29722589
=0.9456

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)
=(717 / 13967) / (571 / 16332)
=0.05133529 / 0.03496204
=1.4683

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)
=((3572 + 2457) / 8890) / ((2815 + 2643) / 8742)
=0.67817773 / 0.62434226
=1.0862

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
=(1619 - -32 - 2609) / 8890
=-0.1078

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 -2.94 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

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 1.17851.30461.08370.77560.91140.94951.16621.10911.13920.7496
GMI 1.13591.05830.95421.20690.76261.75380.51141.43750.62391.142
AQI 1.29510.88958.00971.10110.93350.2380.86240.87662.48681.1295
SGI 0.95961.21351.21891.2341.11870.77161.16220.96281.36170.9606
DEPI 1.18091.03691.0340.82791.0660.8661.14941.01950.95690.9457
SGAI 0.84650.86951.19851.06781.00021.05610.70021.05770.87141.2519
LVGI 0.8410.95180.86851.11021.05881.47490.86771.10930.89060.9407
TATA -0.0299-0.1417-0.067-0.0048-0.1283-0.5538-0.0388-0.0795-0.0403-0.125
M-score -2.20-2.640.30-2.42-3.22-5.41-2.57-2.65-1.76-3.23

Seagate Technology PLC Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.98891.39061.43761.13910.81230.57980.54470.74961.08011.2382
GMI 1.40191.07140.76550.62390.59070.71650.96781.1421.19931.1505
AQI 0.89342.58542.19732.48682.57921.00611.13821.12951.02090.9676
SGI 0.96971.03941.23651.36171.43081.41281.15720.96060.88950.8552
DEPI 0.98940.99750.97060.95690.93030.89970.95230.94570.9460.9456
SGAI 1.05741.09310.96820.87130.89990.8350.99981.25191.30671.4683
LVGI 1.15330.90220.9070.89060.86431.0810.9710.94070.95841.0862
TATA -0.0773-0.0512-0.0165-0.0404-0.1032-0.1335-0.189-0.1251-0.0891-0.1078
M-score -2.77-1.63-1.55-1.76-2.28-3.28-3.60-3.23-2.85-2.94
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