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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-3.32 (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 -3.42 suggests that the company is not a manipulator.

TSM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.64   Max: 33918.27
Current: -3.32

-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 * 0.6531+0.528 * 0.9899+0.404 * 0.8974+0.892 * 1.1968+0.115 * 0.8459
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7861+4.679 * -0.1736-0.327 * 0.8761
=-3.42

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2,957 Mil.
Revenue was 6504.68813419 + 6648.92297933 + 7061.93729285 + 7098.44092384 = $27,314 Mil.
Gross Profit was 3132.45553192 + 3226.8855791 + 3480.77383565 + 3526.41763338 = $13,367 Mil.
Total Current Assets was $21,233 Mil.
Total Assets was $48,247 Mil.
Property, Plant and Equipment(Net PPE) was $25,431 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,051 Mil.
Selling, General & Admin. Expense(SGA) was $729 Mil.
Total Current Liabilities was $6,174 Mil.
Long-Term Debt was $5,877 Mil.
Net Income was 2305.79666049 + 2570.29581011 + 2512.54559739 + 2245.63898839 = $9,634 Mil.
Non Operating Income was 177.49387043 + 707.032319035 + 77.1926827872 + -26.1228506087 = $936 Mil.
Cash Flow from Operations was 3616.19978879 + 3594.61560868 + 4962.13717706 + 4901.41956309 = $17,074 Mil.
Accounts Receivable was $3,783 Mil.
Revenue was 6938.02840928 + 6102.71703901 + 4876.19042763 + 4906.22692864 = $22,823 Mil.
Gross Profit was 3503.87547708 + 3040.67459153 + 2315.69092105 + 2196.21145241 = $11,056 Mil.
Total Current Assets was $15,805 Mil.
Total Assets was $44,801 Mil.
Property, Plant and Equipment(Net PPE) was $27,358 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,153 Mil.
Selling, General & Admin. Expense(SGA) was $775 Mil.
Total Current Liabilities was $5,717 Mil.
Long-Term Debt was $7,056 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)
=(2957.24244326 / 27313.9893302) / (3783.45999137 / 22823.1628046)
=0.10826842 / 0.16577282
=0.6531

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)
=(3226.8855791 / 22823.1628046) / (3132.45553192 / 27313.9893302)
=0.48443998 / 0.48936581
=0.9899

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 - (21232.6939806 + 25431.2159354) / 48247.4115) / (1 - (15805.3233879 + 27357.5347317) / 44801.2860509)
=0.03282045 / 0.036571
=0.8974

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
=27313.9893302 / 22823.1628046
=1.1968

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))
=(6153.07630748 / (6153.07630748 + 27357.5347317)) / (7050.6866807 / (7050.6866807 + 25431.2159354))
=0.18361576 / 0.21706508
=0.8459

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)
=(728.82337734 / 27313.9893302) / (774.708719543 / 22823.1628046)
=0.02668315 / 0.03394397
=0.7861

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)
=((5877.21740461 + 6173.62891994) / 48247.4115) / ((7056.20616641 + 5716.6428927) / 44801.2860509)
=0.24977187 / 0.28510005
=0.8761

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
=(9634.27705639 - 935.596021643 - 17074.3721376) / 48247.4115
=-0.1736

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 -3.42 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.35270.86391.0733035.20362422.74370.93911.19671.05031.2496
GMI 1.01550.90331.11281.03680.9730.88611.08610.94321.02220.9518
AQI 1.07040.88191.0051.05250.91830.93190.78941.28380.90950.379
SGI 1.0031.21521.01991.00940.91271.52981.00621.23581.15121.2114
DEPI 0.89881.04190.96590.93681.09961.23651.0241.02661.06550.8371
SGAI 0.86120.79310.99931.20931.12220.81211.00990.99830.89710.8038
LVGI 0.62952.01270.51451.17251.09331.31740.82021.61941.3170.893
TATA -0.1277-0.1355-0.1395-0.2216-0.1211-0.1081-0.15-0.1321-0.1347-0.1164
M-score -2.58-3.44-2.83-4.4928.262,225.36-3.21-2.82-3.03-2.83

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.02270.99781.03560.97280.96151.2261.21420.97220.85630.6531
GMI 0.96160.99921.02261.003410.98550.95170.95360.96550.9899
AQI 1.4021.49710.90950.96280.41510.38580.3790.38660.82210.8974
SGI 1.27511.22111.16771.13331.12491.15951.24671.32831.29831.1968
DEPI 1.02571.00661.05371.05591.0140.9380.8180.77910.79650.8459
SGAI 0.89030.88450.89670.92540.87010.83590.80570.74990.74560.7861
LVGI 1.25561.32771.3171.10890.96240.93380.8930.86560.9340.8761
TATA -0.121-0.1334-0.1344-0.1431-0.1361-0.1152-0.1186-0.133-0.1429-0.1736
M-score -2.70-2.80-3.03-3.09-3.24-2.88-2.85-3.05-3.06-3.42
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