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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 * 0.99+0.404 * 0.8959+0.892 * 1.1968+0.115 * 0.8459
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7862+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 + 7098.01217789 = $27,314 Mil.
Gross Profit was 3132.45553192 + 3226.8855791 + 3480.77383565 + 3526.12170235 = $13,366 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 + 2245.25894762 = $9,634 Mil.
Non Operating Income was 177.49387043 + 707.032319035 + 77.1926827872 + -26.1028837168 = $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 6937.92200724 + 6102.57135712 + 4876.19042763 + 4905.48901524 = $22,822 Mil.
Gross Profit was 3503.97809565 + 3040.77775925 + 2315.79263158 + 2196.21145241 = $11,057 Mil.
Total Current Assets was $15,805 Mil.
Total Assets was $44,804 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 / 27313.5605843) / (3783.45999137 / 22822.1728072)
=0.10827012 / 0.16578001
=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 / 22822.1728072) / (3132.45553192 / 27313.5605843)
=0.48447446 / 0.48936266
=0.99

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) / 44804.1830673)
=0.03282045 / 0.0366333
=0.8959

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
=27313.5605843 / 22822.1728072
=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)
=(728.860249108 / 27313.5605843) / (774.670406281 / 22822.1728072)
=0.02668492 / 0.03394376
=0.7862

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) / 44804.1830673)
=0.24977187 / 0.28508162
=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
=(9633.89701562 - 935.615988535 - 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.86391.0733035.29942848.15670.79621.07741.17051.24970.6676
GMI 0.90331.11281.03680.9730.88611.08570.94471.0210.95181.0177
AQI 0.88191.0051.05250.91830.93190.78941.17840.99090.3791.0297
SGI 1.21521.01991.01210.91031.52981.00621.23461.15241.21131.0572
DEPI 1.04190.96590.93491.10191.23651.0241.02661.06560.83710.9508
SGAI 0.79310.99931.20921.12230.81211.00990.99960.89590.80380.863
LVGI 2.01270.51451.17251.09331.25350.99190.85252.17430.8930.8865
TATA -0.1354-0.1396-0.2222-0.1211-0.1081-0.15-0.1286-0.1362-0.1164-0.1548
M-score -3.44-2.83-4.4928.342,616.76-3.40-2.71-3.18-2.83-3.38

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.98971.15450.97230.9611.22611.21430.97230.85630.65310.6682
GMI 0.99891.02091.00230.99940.98490.95170.95350.96540.991.0176
AQI 1.56410.99090.96350.41580.38650.3790.38630.82060.89591.0297
SGI 1.22191.16841.13391.12551.15941.24671.32821.29831.19681.0563
DEPI 1.00671.05381.05591.0140.9380.8180.77910.79650.84590.9523
SGAI 0.88370.89590.92480.86950.8360.80570.750.74570.78620.8616
LVGI 1.36282.17431.10890.96240.93380.8930.86560.93410.87610.8865
TATA -0.1277-0.1357-0.1437-0.1371-0.1162-0.1182-0.133-0.1429-0.1736-0.1589
M-score -2.76-3.18-3.09-3.25-2.89-2.84-3.05-3.06-3.42-3.40
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