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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-3.27 (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 -3.27 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: -3.27

-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 * 0.8721+0.528 * 1.1747+0.404 * 1.5456+0.892 * 0.8102+0.115 * 1.0056
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0538+4.679 * -0.1595-0.327 * 1.178
=-3.27

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,250 Mil.
Revenue was 2595 + 2986 + 2925 + 2928 = $11,434 Mil.
Gross Profit was 524 + 741 + 689 + 776 = $2,730 Mil.
Total Current Assets was $3,600 Mil.
Total Assets was $8,374 Mil.
Property, Plant and Equipment(Net PPE) was $2,165 Mil.
Depreciation, Depletion and Amortization(DDA) was $827 Mil.
Selling, General & Admin. Expense(SGA) was $695 Mil.
Total Current Liabilities was $2,259 Mil.
Long-Term Debt was $4,130 Mil.
Net Income was -21 + 165 + 34 + 137 = $315 Mil.
Non Operating Income was 28 + -2 + -9 + -5 = $12 Mil.
Cash Flow from Operations was 205 + 382 + 824 + 228 = $1,639 Mil.
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.



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)
=(1250 / 11434) / (1769 / 14112)
=0.10932307 / 0.12535431
=0.8721

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)
=(741 / 14112) / (524 / 11434)
=0.28047052 / 0.23876159
=1.1747

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 - (3600 + 2165) / 8374) / (1 - (5831 + 2182) / 10036)
=0.31155959 / 0.20157433
=1.5456

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
=11434 / 14112
=0.8102

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))
=(840 / (840 + 2182)) / (827 / (827 + 2165))
=0.27796161 / 0.27640374
=1.0056

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)
=(695 / 11434) / (814 / 14112)
=0.06078363 / 0.05768141
=1.0538

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)
=((4130 + 2259) / 8374) / ((3457 + 3043) / 10036)
=0.76295677 / 0.64766839
=1.178

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
=(315 - 12 - 1639) / 8374
=-0.1595

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 -3.27 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 1.03740.82791.0660.8661.14941.01950.95690.94570.9531.0812
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 -0.067-0.0048-0.1283-0.5483-0.0388-0.0795-0.0403-0.125-0.1006-0.1034
M-score 0.30-2.42-3.22-5.39-2.57-2.65-1.76-3.23-3.02-2.89

Seagate Technology PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.14591.16331.08261.18721.11491.06291.00240.86790.89120.8721
GMI 1.15051.04420.97980.97660.98690.99391.01081.04521.0751.1747
AQI 0.96760.97130.98441.26471.13131.20961.22061.03521.59821.5456
SGI 0.85520.89870.95640.99381.01581.01911.00110.91860.85770.8102
DEPI 0.94560.92250.9531.00611.05261.08351.08121.0641.03931.0056
SGAI 1.46831.37741.18891.14371.07781.08081.18431.18211.13471.0538
LVGI 1.08621.12931.14251.15960.92050.9880.99161.15161.21631.178
TATA -0.1078-0.0832-0.1006-0.0931-0.0987-0.1109-0.1035-0.1751-0.1334-0.1595
M-score -3.03-2.91-3.02-2.73-2.76-2.84-2.89-3.53-3.14-3.27
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