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TE Connectivity Ltd (NYSE:TEL)
Beneish M-Score
-2.28 (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.

TE Connectivity Ltd has a M-score of -2.28 suggests that the company is not a manipulator.

TEL' s Beneish M-Score Range Over the Past 10 Years
Min: -4.04   Max: -2.22
Current: -2.28

-4.04
-2.22

During the past 13 years, the highest Beneish M-Score of TE Connectivity Ltd was -2.22. The lowest was -4.04. And the median was -2.63.


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 TE Connectivity Ltd 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 * 0.9647+0.528 * 1.0138+0.404 * 1.1689+0.892 * 1.0004+0.115 * 1.0831
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9723+4.679 * 0.0408-0.327 * 1.1431
=-2.28

* 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 $2,046 Mil.
Revenue was 3332 + 3121 + 2952 + 2833 = $12,238 Mil.
Gross Profit was 1104 + 1022 + 962 + 945 = $4,033 Mil.
Total Current Assets was $4,775 Mil.
Total Assets was $17,608 Mil.
Property, Plant and Equipment(Net PPE) was $3,052 Mil.
Depreciation, Depletion and Amortization(DDA) was $585 Mil.
Selling, General & Admin. Expense(SGA) was $1,463 Mil.
Total Current Liabilities was $3,066 Mil.
Long-Term Debt was $3,739 Mil.
Net Income was 437 + 839 + 380 + 353 = $2,009 Mil.
Non Operating Income was -1 + -651 + 12 + 8 = $-632 Mil.
Cash Flow from Operations was 684 + 718 + 154 + 366 = $1,922 Mil.
Accounts Receivable was $2,120 Mil.
Revenue was 2984 + 3118 + 3082 + 3049 = $12,233 Mil.
Gross Profit was 968 + 1048 + 1051 + 1020 = $4,087 Mil.
Total Current Assets was $7,885 Mil.
Total Assets was $20,589 Mil.
Property, Plant and Equipment(Net PPE) was $2,920 Mil.
Depreciation, Depletion and Amortization(DDA) was $616 Mil.
Selling, General & Admin. Expense(SGA) was $1,504 Mil.
Total Current Liabilities was $3,575 Mil.
Long-Term Debt was $3,386 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)
=(2046 / 12238) / (2120 / 12233)
=0.16718418 / 0.17330172
=0.9647

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)
=(4087 / 12233) / (4033 / 12238)
=0.3340963 / 0.32954731
=1.0138

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 - (4775 + 3052) / 17608) / (1 - (7885 + 2920) / 20589)
=0.55548614 / 0.47520521
=1.1689

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
=12238 / 12233
=1.0004

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))
=(616 / (616 + 2920)) / (585 / (585 + 3052))
=0.17420814 / 0.16084685
=1.0831

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)
=(1463 / 12238) / (1504 / 12233)
=0.11954568 / 0.12294613
=0.9723

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)
=((3739 + 3066) / 17608) / ((3386 + 3575) / 20589)
=0.38647206 / 0.33809316
=1.1431

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
=(2009 - -632 - 1922) / 17608
=0.0408

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.

TE Connectivity Ltd has a M-score of -2.28 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.

TE Connectivity Ltd Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 1.00840.9261.04210.97190.90781.03821.15620.84241.00870.9647
GMI 1.04770.88231.17420.79021.00951.01760.95030.96620.9931.0138
AQI 0.87791.130.93020.95120.98571.15810.97990.85161.14651.1689
SGI 1.09431.06780.71361.17691.14150.9640.85761.05121.02171.0004
DEPI 1.02670.95350.97780.92511.00830.95561.10050.91210.91121.0831
SGAI 0.99780.88531.25440.92820.98431.01150.99661.01340.95960.9723
LVGI 1.18150.75131.01551.10251.01031.01210.97191.07010.93671.1431
TATA -0.07820.0105-0.2838-0.0443-0.0317-0.0458-0.0318-0.01810.02730.0408
M-score -2.83-2.35-4.01-2.72-2.59-2.63-2.63-2.78-2.25-2.28

TE Connectivity Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.34340.81090.97960.8010.77281.04780.8091.03341.02340.9647
GMI 0.96950.9620.98040.98730.98610.99730.99691.01261.02351.0138
AQI 0.94190.85161.12741.01061.02091.14650.93981.10851.1461.1689
SGI 0.82551.09191.04991.08841.12960.98360.98820.96820.9651.0004
DEPI 1.01140.76190.790.97450.96921.09081.05130.99071.01311.0831
SGAI 0.92861.03160.99241.00491.00890.94270.95740.95370.94130.9723
LVGI 0.94721.07011.0881.07331.1010.93670.97141.02891.10661.1431
TATA -0.0472-0.0378-0.02230.01260.00310.02730.01530.01690.07840.0408
M-score -2.55-2.88-2.57-2.56-2.60-2.22-2.60-2.35-2.07-2.28
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