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Seagate Technology PLC (NAS:STX)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

STX' s 10-Year Beneish M-Score Range
Min: -5.41   Max: 0.3
Current: -2.89

-5.41
0.3

During the past 13 years, the highest Beneish M-Score of Seagate Technology PLC was 0.30. The lowest was -5.41. 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 * 1.0024+0.528 * 1.0108+0.404 * 1.2206+0.892 * 1.0011+0.115 * 1.0812
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1843+4.679 * -0.1035-0.327 * 0.9916
=-2.89

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,735 Mil.
Revenue was 2928 + 3330 + 3696 + 3785 = $13,739 Mil.
Gross Profit was 776 + 955 + 1027 + 1051 = $3,809 Mil.
Total Current Assets was $5,568 Mil.
Total Assets was $9,845 Mil.
Property, Plant and Equipment(Net PPE) was $2,278 Mil.
Depreciation, Depletion and Amortization(DDA) was $841 Mil.
Selling, General & Admin. Expense(SGA) was $856 Mil.
Total Current Liabilities was $2,343 Mil.
Long-Term Debt was $4,155 Mil.
Net Income was 137 + 291 + 933 + 381 = $1,742 Mil.
Non Operating Income was -5 + 8 + 122 + -11 = $114 Mil.
Cash Flow from Operations was 228 + 374 + 1443 + 602 = $2,647 Mil.
Accounts Receivable was $1,729 Mil.
Revenue was 3301 + 3406 + 3528 + 3489 = $13,724 Mil.
Gross Profit was 925 + 959 + 987 + 975 = $3,846 Mil.
Total Current Assets was $5,777 Mil.
Total Assets was $9,492 Mil.
Property, Plant and Equipment(Net PPE) was $2,136 Mil.
Depreciation, Depletion and Amortization(DDA) was $879 Mil.
Selling, General & Admin. Expense(SGA) was $722 Mil.
Total Current Liabilities was $2,398 Mil.
Long-Term Debt was $3,920 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)
=(1735 / 13739) / (1729 / 13724)
=0.12628284 / 0.12598368
=1.0024

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)
=(955 / 13724) / (776 / 13739)
=0.280239 / 0.27723997
=1.0108

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 - (5568 + 2278) / 9845) / (1 - (5777 + 2136) / 9492)
=0.20304723 / 0.16635061
=1.2206

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
=13739 / 13724
=1.0011

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))
=(879 / (879 + 2136)) / (841 / (841 + 2278))
=0.29154229 / 0.2696377
=1.0812

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)
=(856 / 13739) / (722 / 13724)
=0.06230439 / 0.05260857
=1.1843

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)
=((4155 + 2343) / 9845) / ((3920 + 2398) / 9492)
=0.66003047 / 0.66561315
=0.9916

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
=(1742 - 114 - 2647) / 9845
=-0.1035

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 -2.89 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 8.00971.10110.93350.23930.85780.87662.48681.12950.98441.2206
SGI 1.21891.2341.11870.77161.16220.96281.36170.96060.95631.0011
DEPI 1.0340.82791.0660.8661.14941.01950.95690.94570.9531.0812
SGAI 1.19851.06781.00021.05610.70021.05770.87141.25191.1891.1857
LVGI 0.86851.11021.05881.48360.86271.10930.89060.94071.14250.9916
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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.54470.74961.08011.14591.16331.08261.18721.11491.06291.0024
GMI 0.96781.1421.19931.15051.04420.97980.97660.98690.99391.0108
AQI 1.13821.12951.02090.96760.97130.98441.26471.13131.20961.2206
SGI 1.15720.96060.88950.85520.89870.95640.99381.01581.01911.0011
DEPI 0.95230.94570.9460.94560.92250.9531.00611.05261.08351.0812
SGAI 0.99981.25191.30671.46831.37741.18891.14371.07781.08081.1843
LVGI 0.9710.94070.95841.08621.12931.14251.15960.92050.9880.9916
TATA -0.189-0.1251-0.0891-0.1078-0.0832-0.1006-0.0931-0.0987-0.1109-0.1035
M-score -3.60-3.23-2.85-3.03-2.91-3.02-2.73-2.76-2.84-2.89
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