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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-2.59 (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 -2.52 suggests that the company is not a manipulator.

TSM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.64   Max: 114774.83
Current: -2.59

-4.64
114774.83

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was 114774.83. The lowest was -4.64. And the median was -2.99.


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 * 1.3682+0.528 * 0.9961+0.404 * 1.3148+0.892 * 1.0103+0.115 * 1.1481
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0128+4.679 * -0.1151-0.327 * 0.9544
=-2.52

* 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 $4,115 Mil.
Revenue was 8278.73684679 + 6867.17789474 + 6244.60254577 + 6207.07095043 = $27,598 Mil.
Gross Profit was 4197.92565536 + 3539.75962848 + 2802.84950625 + 3016.87757125 = $13,557 Mil.
Total Current Assets was $22,558 Mil.
Total Assets was $54,637 Mil.
Property, Plant and Equipment(Net PPE) was $29,722 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,929 Mil.
Selling, General & Admin. Expense(SGA) was $746 Mil.
Total Current Liabilities was $8,188 Mil.
Long-Term Debt was $4,837 Mil.
Net Income was 3075.99315874 + 2244.77773994 + 1987.93070328 + 2107.75227581 = $9,416 Mil.
Non Operating Income was 89.3356476625 + 89.9942724458 + 80.9872834286 + -17.70820817 = $243 Mil.
Cash Flow from Operations was 4018.58962621 + 3302.67464396 + 3729.32032012 + 4412.01408945 = $15,463 Mil.
Accounts Receivable was $2,977 Mil.
Revenue was 6505.2780116 + 6648.92297933 + 7062.55905236 + 7098.44092384 = $27,315 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.



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)
=(4114.87865667 / 27597.5882377) / (2976.81721483 / 27315.2009671)
=0.14910284 / 0.10898024
=1.3682

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)
=(13366.53258 / 27315.2009671) / (13557.4123613 / 27597.5882377)
=0.48934411 / 0.49125352
=0.9961

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 - (22558.0802831 + 29721.5967917) / 54637.4566222) / (1 - (21232.6939806 + 25431.2159354) / 48247.4115)
=0.04315317 / 0.03282045
=1.3148

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
=27597.5882377 / 27315.2009671
=1.0103

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))
=(7050.6866807 / (7050.6866807 + 25431.2159354)) / (6929.47497614 / (6929.47497614 + 29721.5967917))
=0.21706508 / 0.18906609
=1.1481

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)
=(745.819343805 / 27597.5882377) / (728.82337734 / 27315.2009671)
=0.0270248 / 0.02668197
=1.0128

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)
=((4837.30282107 + 8187.73761611) / 54637.4566222) / ((5877.21740461 + 6173.62891994) / 48247.4115)
=0.23839031 / 0.24977187
=0.9544

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
=(9416.45387777 - 242.608995367 - 15462.5986797) / 54637.4566222
=-0.1151

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 -2.52 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.

Taiwan Semiconductor Manufacturing Co Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.86391.07330125587.99430.79840.89741.06531.05031.24960.6725
GMI 0.90331.11281.03680.9730.88611.08610.94321.02230.95181.0177
AQI 0.88191.0051.05250.91830.93190.86621.16990.91070.37851.0318
SGI 1.21521.01991.00940.91271.52981.00621.23571.15131.21141.0572
DEPI 1.04190.96590.93681.09961.23651.0241.02661.06550.83710.9508
SGAI 0.79310.99931.20931.12220.81211.00990.99840.8970.80380.863
LVGI 2.01270.51451.17251.09331.25351.04161.34021.27180.92470.8299
TATA -0.1354-0.1396-0.2216-0.1211-0.1081-0.149-0.1303-0.1347-0.1164-0.1548
M-score -3.44-2.83-4.49115,536.82-2.81-3.29-2.89-3.02-2.84-3.36

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.99881.23371.21420.97020.86030.65340.67311.00231.12711.3682
GMI 0.99980.98530.95170.95360.96550.991.01771.04741.02350.9961
AQI 0.41510.38580.37850.38660.82210.89741.03181.18231.41991.3148
SGI 1.12471.15931.24671.32841.29841.19681.05630.94130.93071.0103
DEPI 1.0140.9380.8180.77910.79650.84590.95231.00671.04711.1481
SGAI 0.87030.83610.80570.74990.74560.78610.86160.94720.99041.0128
LVGI 0.96240.93380.92470.86560.9340.87610.82990.93651.010.9544
TATA -0.1362-0.1153-0.1186-0.133-0.1429-0.1736-0.1589-0.1383-0.1207-0.1151
M-score -3.21-2.88-2.86-3.05-3.06-3.42-3.38-3.05-2.80-2.52
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