Switch to:

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1367

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1372

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1367

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1372

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1367

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1372
Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-3.24 (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 -3.24 suggests that the company is not a manipulator.

TSM' s 10-Year Beneish M-Score Range
Min: -4.28   Max: -1.69
Current: -3.24

-4.28
-1.69

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was -1.69. The lowest was -4.28. And the median was -3.04.


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 * 0.9635+0.528 * 0.9998+0.404 * 0.4158+0.892 * 1.1251+0.115 * 1.0154
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8704+4.679 * -0.1368-0.327 * 0.9624
=-3.24

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,997 Mil.
Revenue was 6110.92574043 + 4909.62107111 + 4838.26154765 + 5534.16053375 = $21,393 Mil.
Gross Profit was 3044.94056563 + 2331.66945981 + 2166.11338598 + 2685.46178984 = $10,228 Mil.
Total Current Assets was $15,333 Mil.
Total Assets was $44,911 Mil.
Property, Plant and Equipment(Net PPE) was $27,953 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,656 Mil.
Selling, General & Admin. Expense(SGA) was $778 Mil.
Total Current Liabilities was $8,235 Mil.
Long-Term Debt was $7,067 Mil.
Net Income was 1993.46502387 + 1585.49150465 + 1348.58826653 + 1768.45637744 = $6,696 Mil.
Non Operating Income was 139.759290794 + 31.8737124499 + 107.459649589 + 15.7999795759 = $295 Mil.
Cash Flow from Operations was 2729.60242412 + 3141.81899778 + 3410.30876692 + 3261.12628927 = $12,543 Mil.
Accounts Receivable was $2,765 Mil.
Revenue was 5207.25877676 + 4450.95168807 + 4517.00635739 + 4838.90476028 = $19,014 Mil.
Gross Profit was 2552.76701072 + 2037.40939417 + 2133.70491409 + 2365.26684221 = $9,089 Mil.
Total Current Assets was $11,773 Mil.
Total Assets was $39,078 Mil.
Property, Plant and Equipment(Net PPE) was $23,903 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,926 Mil.
Selling, General & Admin. Expense(SGA) was $794 Mil.
Total Current Liabilities was $8,138 Mil.
Long-Term Debt was $5,697 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)
=(2997.19529867 / 21392.9688929) / (2764.92821592 / 19014.1215825)
=0.14010189 / 0.14541446
=0.9635

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)
=(2331.66945981 / 19014.1215825) / (3044.94056563 / 21392.9688929)
=0.47802093 / 0.47810967
=0.9998

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 - (15332.717453 + 27953.1011386) / 44911.1745634) / (1 - (11773.4693857 + 23903.364933) / 39078.2461168)
=0.03619046 / 0.08704106
=0.4158

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
=21392.9688929 / 19014.1215825
=1.1251

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))
=(4926.14653345 / (4926.14653345 + 23903.364933)) / (5655.88628711 / (5655.88628711 + 27953.1011386))
=0.17087166 / 0.16828494
=1.0154

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)
=(777.989924342 / 21392.9688929) / (794.462070505 / 19014.1215825)
=0.03636662 / 0.04178274
=0.8704

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)
=((7067.1625096 + 8235.16902067) / 44911.1745634) / ((5697.34602666 + 8138.13899188) / 39078.2461168)
=0.34072437 / 0.3540457
=0.9624

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
=(6696.00117249 - 294.892632409 - 12542.8564781) / 44911.1745634
=-0.1368

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 -3.24 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 0.82791.33750.84871.08240.4222.15060.85590.93591.19671.0503
GMI 0.81941.01550.90331.11281.03680.9730.88611.08610.94321.0222
AQI 1.57661.07040.88191.0051.05250.91830.93190.78941.28380.9095
SGI 1.3441.03171.16031.02971.00120.92961.55280.98811.22281.1377
DEPI 1.15830.89881.04190.96590.93681.09961.23651.0241.02661.0655
SGAI 1.07380.86120.79310.99931.20931.12220.81211.00990.99830.897
LVGI 0.9950.62952.01270.51451.17251.09331.31740.82021.61941.317
TATA -0.1282-0.1277-0.1355-0.1395-0.2216-0.1211-0.1081-0.15-0.1321-0.1362
M-score -2.79-2.57-3.50-2.81-4.11-2.14-2.76-3.23-2.83-3.05

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.02531.14221.35591.2311.05591.15880.99731.02680.98250.9635
GMI 1.09761.05890.98070.94380.94730.96180.99911.02241.00330.9998
AQI 0.77070.76780.71831.28381.41771.4021.49710.90950.96350.4158
SGI 1.00680.99821.09591.18881.25271.27891.21761.16371.13351.1251
DEPI 1.30791.29131.41121.04941.01591.02511.00951.04651.06431.0154
SGAI 1.05461.0671.05470.99920.88920.88980.88420.89690.92570.8704
LVGI 1.11031.04891.31251.61941.36691.25561.32771.3171.10890.9624
TATA -0.1413-0.1315-0.1311-0.1305-0.1322-0.1211-0.1324-0.1372-0.143-0.1368
M-score -3.16-3.02-2.87-2.82-2.78-2.57-2.79-3.06-3.07-3.24
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK