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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-2.87 (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.

Taiwan Semiconductor Manufacturing Co Ltd has a M-score of -2.91 suggests that the company is not a manipulator.

TSM' s 10-Year Beneish M-Score Range
Min: -4.64   Max: 33918.27
Current: -2.87

-4.64
33918.27

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was 33918.27. The lowest was -4.64. And the median was -3.03.


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 Taiwan Semiconductor Manufacturing Co 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 * 1.2112+0.528 * 0.985+0.404 * 0.3865+0.892 * 1.1538+0.115 * 0.9286
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8367+4.679 * -0.1167-0.327 * 0.9338
=-2.91

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $3,750 Mil.
Revenue was 6877.34494874 + 6110.90533605 + 4909.62107111 + 4839.68287098 = $22,738 Mil.
Gross Profit was 3473.38382177 + 3044.93039858 + 2331.66945981 + 2166.11338598 = $11,016 Mil.
Total Current Assets was $15,667 Mil.
Total Assets was $44,413 Mil.
Property, Plant and Equipment(Net PPE) was $27,119 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,129 Mil.
Selling, General & Admin. Expense(SGA) was $772 Mil.
Total Current Liabilities was $5,667 Mil.
Long-Term Debt was $6,995 Mil.
Net Income was 2511.32492664 + 1993.4583677 + 1585.49150465 + 1348.58826653 = $7,439 Mil.
Non Operating Income was 58.0747062152 + 139.758824138 + 31.8737124499 + 107.459649589 = $337 Mil.
Cash Flow from Operations was 3001.8383756 + 2729.59330998 + 3141.81899778 + 3410.30876692 = $12,284 Mil.
Accounts Receivable was $2,684 Mil.
Revenue was 5532.46672567 + 5207.25877676 + 4450.95168807 + 4516.63969072 = $19,707 Mil.
Gross Profit was 2685.46178984 + 2552.76701072 + 2037.40939417 + 2128.80821306 = $9,404 Mil.
Total Current Assets was $11,513 Mil.
Total Assets was $40,084 Mil.
Property, Plant and Equipment(Net PPE) was $24,772 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,117 Mil.
Selling, General & Admin. Expense(SGA) was $800 Mil.
Total Current Liabilities was $5,048 Mil.
Long-Term Debt was $7,190 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)
=(3750.42547802 / 22737.5542269) / (2683.88157402 / 19707.3168812)
=0.1649441 / 0.13618706
=1.2112

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)
=(3044.93039858 / 19707.3168812) / (3473.38382177 / 22737.5542269)
=0.47720582 / 0.48448909
=0.985

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 - (15667.3224132 + 27118.6679673) / 44412.9844324) / (1 - (11512.7765599 + 24771.6248766) / 40083.7462981)
=0.0366333 / 0.09478517
=0.3865

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
=22737.5542269 / 19707.3168812
=1.1538

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))
=(5116.81551465 / (5116.81551465 + 24771.6248766)) / (6129.28793915 / (6129.28793915 + 27118.6679673))
=0.17119714 / 0.18435082
=0.9286

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)
=(772.299885513 / 22737.5542269) / (800.029431056 / 19707.3168812)
=0.03396583 / 0.04059555
=0.8367

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)
=((6994.59633378 + 5666.72918504) / 44412.9844324) / ((7189.81400415 + 5047.62868911) / 40083.7462981)
=0.28508162 / 0.30529688
=0.9338

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
=(7438.86306551 - 337.166892392 - 12283.5594503) / 44412.9844324
=-0.1167

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.

Taiwan Semiconductor Manufacturing Co Ltd has a M-score of -2.91 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.

Taiwan Semiconductor Manufacturing Co Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.83771.35270.69691.330.42290.00080.152314893.38611.06631.1743
GMI 0.81941.01550.90331.11261.0370.9730.88611.08570.94471.021
AQI 1.57661.07041.0350.85621.05260.91830.93190.78941.17840.9909
SGI 1.3441.03171.16041.02961.0040.92711.55280.98811.22161.1388
DEPI 1.15830.89881.0510.95750.93691.09961.23651.0241.02661.0656
SGAI 1.07380.86120.79221.00051.20921.12230.81211.00990.99960.8959
LVGI 0.9950.62950.95941.07921.17271.16551.1760.99190.85252.1743
TATA -0.1282-0.1277-0.1369-0.1396-0.2216-0.1211-0.1081-0.15-0.1286-0.1362
M-score -2.78-2.55-3.24-2.83-4.10-4.14-3.3613,697.77-2.73-3.18

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 24880.71431.19021.09631.08961.02210.99311.15670.98160.96241.2112
GMI 1.05980.98150.94570.94830.96150.99871.02071.00210.99920.985
AQI 0.76780.68751.17841.41771.4021.56410.99090.96350.41580.3865
SGI 0.99811.09521.18811.25221.27841.21821.16441.1341.12561.1538
DEPI 0.9541.06421.04931.01591.02511.00961.04661.06431.01540.9286
SGAI 1.06731.055610.88960.890.88360.89610.92510.86990.8367
LVGI 1.04891.27870.85251.36691.25561.36282.17431.10890.96240.9338
TATA -0.1333-0.1352-0.1273-0.1283-0.1164-0.1269-0.1372-0.143-0.1368-0.1167
M-score 22,886.14-3.08-2.72-2.73-2.68-2.76-3.18-3.08-3.24-2.91
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