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GuruFocus has detected 7 Warning Signs with Symantec Corp $SYMC.
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Symantec Corp (NAS:SYMC)
Beneish M-Score
-1.50 (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.

Symantec Corp has a M-score of -1.50 signals that the company is a manipulator.

SYMC' s Beneish M-Score Range Over the Past 10 Years
Min: -6.57   Max: -1.01
Current: -1.5

-6.57
-1.01

During the past 13 years, the highest Beneish M-Score of Symantec Corp was -1.01. The lowest was -6.57. And the median was -2.79.


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 Symantec Corp 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 * 1.0913+0.528 * 1.0231+0.404 * 1.7641+0.892 * 1.0416+0.115 * 0.7437
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0048+4.679 * 0.1416-0.327 * 1.2745
=-1.50

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $557 Mil.
Revenue was 1041 + 979 + 884 + 873 = $3,777 Mil.
Gross Profit was 806 + 769 + 735 + 726 = $3,036 Mil.
Total Current Assets was $6,511 Mil.
Total Assets was $16,760 Mil.
Property, Plant and Equipment(Net PPE) was $893 Mil.
Depreciation, Depletion and Amortization(DDA) was $428 Mil.
Selling, General & Admin. Expense(SGA) was $1,751 Mil.
Total Current Liabilities was $3,605 Mil.
Long-Term Debt was $6,358 Mil.
Net Income was 46 + -144 + 135 + 2045 = $2,082 Mil.
Non Operating Income was 5 + 10 + 13 + 3 = $31 Mil.
Cash Flow from Operations was 144 + 55 + -772 + 250 = $-323 Mil.
Accounts Receivable was $490 Mil.
Revenue was 909 + 906 + 912 + 899 = $3,626 Mil.
Gross Profit was 759 + 746 + 754 + 723 = $2,982 Mil.
Total Current Assets was $7,173 Mil.
Total Assets was $11,936 Mil.
Property, Plant and Equipment(Net PPE) was $986 Mil.
Depreciation, Depletion and Amortization(DDA) was $313 Mil.
Selling, General & Admin. Expense(SGA) was $1,673 Mil.
Total Current Liabilities was $3,827 Mil.
Long-Term Debt was $1,740 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)
=(557 / 3777) / (490 / 3626)
=0.14747154 / 0.13513514
=1.0913

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)
=(2982 / 3626) / (3036 / 3777)
=0.82239382 / 0.80381255
=1.0231

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 - (6511 + 893) / 16760) / (1 - (7173 + 986) / 11936)
=0.55823389 / 0.31643767
=1.7641

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
=3777 / 3626
=1.0416

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))
=(313 / (313 + 986)) / (428 / (428 + 893))
=0.24095458 / 0.32399697
=0.7437

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)
=(1751 / 3777) / (1673 / 3626)
=0.46359545 / 0.46138996
=1.0048

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)
=((6358 + 3605) / 16760) / ((1740 + 3827) / 11936)
=0.59445107 / 0.46640416
=1.2745

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
=(2082 - 31 - -323) / 16760
=0.1416

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.

Symantec Corp has a M-score of -1.50 signals that the company is likely to 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.

Symantec Corp Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.79221.00621.05451.05091.14420.86891.04991.61250.7350.8728
GMI 0.99590.96710.98970.98170.9810.99041.01131.02340.99350.9844
AQI 0.97271.04140.81060.88231.06930.9910.85841.0411.03670.6312
SGI 1.25491.12981.04690.97321.03431.08721.02620.60570.94570.91
DEPI 0.94640.94440.92211.12331.14851.01861.02761.46480.91731.1333
SGAI 1.07171.0520.94351.02381.07110.98510.97751.11530.97320.8668
LVGI 1.57231.06831.52181.01221.07690.92921.05060.89530.99081.132
TATA -0.072-0.0784-0.7957-0.0921-0.0903-0.0927-0.0596-0.0309-0.03390.1438
M-score -3.00-2.76-6.36-2.94-2.74-2.94-2.75-2.32-2.92-2.17

Symantec Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 2.0712.16710.55690.84391.16130.47531.15190.64010.62911.0913
GMI 1.02041.03290.9890.9870.99080.97380.98890.98830.99751.0231
AQI 0.97480.98661.03671.0031.01380.62240.63120.64671.06991.7641
SGI 0.60840.5081.24811.04490.88021.04980.68950.81220.98861.0416
DEPI 1.60611.83550.91731.08091.20480.73441.13330.84030.65840.7437
SGAI 1.09991.2360.86860.90610.96260.83880.97110.92510.91441.0048
LVGI 0.96720.9690.99080.98410.97661.02221.1321.13211.36251.2745
TATA -0.0205-0.0272-0.0336-0.0441-0.0494-0.03520.14380.23960.15040.1416
M-score -1.88-1.89-2.80-2.76-2.63-3.26-2.12-2.06-2.24-1.50
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