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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(3044.93039858 / 19707.3168812)||/||(3473.38382177 / 22737.5542269)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(7438.86306551 - 337.166892392||-||12283.5594503)||/||44412.9844324|
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.
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
Taiwan Semiconductor Manufacturing Co Ltd Annual Data
Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data