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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-2.77 (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 -2.84 suggests that the company is not a manipulator.

TSM' s 10-Year Beneish M-Score Range
Min: -4.51   Max: 2225.26
Current: -2.77

-4.51
2225.26

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was 2225.26. The lowest was -4.51. And the median was -2.86.


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 * 1.2143+0.528 * 0.9517+0.404 * 0.379+0.892 * 1.2467+0.115 * 0.818
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8057+4.679 * -0.1182-0.327 * 0.893
=-2.84

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $3,675 Mil.
Revenue was 7098.01217789 + 6937.92200724 + 6102.57135712 + 4876.19042763 = $25,015 Mil.
Gross Profit was 3526.12170235 + 3503.97809565 + 3040.77775925 + 2315.79263158 = $12,387 Mil.
Total Current Assets was $19,985 Mil.
Total Assets was $47,680 Mil.
Property, Plant and Equipment(Net PPE) was $26,097 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,568 Mil.
Selling, General & Admin. Expense(SGA) was $789 Mil.
Total Current Liabilities was $7,170 Mil.
Long-Term Debt was $6,842 Mil.
Net Income was 2245.25894762 + 2533.44518934 + 1990.73971324 + 1574.69555921 = $8,344 Mil.
Non Operating Income was -26.1028837168 + 58.586240085 + 139.568222741 + 31.6566776316 = $204 Mil.
Cash Flow from Operations was 4901.41956309 + 3028.27918091 + 2725.87072357 + 3120.42569079 = $13,776 Mil.
Accounts Receivable was $2,428 Mil.
Revenue was 4905.48901524 + 5488.2028829 + 5208.65067326 + 4463.10290805 = $20,065 Mil.
Gross Profit was 2196.21145241 + 2663.16075347 + 2553.44936349 + 2043.0260548 = $9,456 Mil.
Total Current Assets was $12,061 Mil.
Total Assets was $42,486 Mil.
Property, Plant and Equipment(Net PPE) was $26,668 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,249 Mil.
Selling, General & Admin. Expense(SGA) was $786 Mil.
Total Current Liabilities was $6,862 Mil.
Long-Term Debt was $7,119 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)
=(3675.25732093 / 25014.6959699) / (2427.85721495 / 20065.4454794)
=0.14692393 / 0.12099693
=1.2143

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)
=(3503.97809565 / 20065.4454794) / (3526.12170235 / 25014.6959699)
=0.47125032 / 0.49517572
=0.9517

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 - (19984.9323326 + 26097.2636427) / 47679.8216376) / (1 - (12060.9191535 + 26668.4352185) / 42485.6407496)
=0.03350737 / 0.08841308
=0.379

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
=25014.6959699 / 20065.4454794
=1.2467

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))
=(5249.44038494 / (5249.44038494 + 26668.4352185)) / (6568.06520978 / (6568.06520978 + 26097.2636427))
=0.1644671 / 0.20107146
=0.818

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)
=(789.260563579 / 25014.6959699) / (785.773407515 / 20065.4454794)
=0.03155188 / 0.03916053
=0.8057

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)
=((6842.19776154 + 7169.74728804) / 47679.8216376) / ((7118.52101067 + 6862.49705615) / 42485.6407496)
=0.29387579 / 0.32907631
=0.893

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
=(8344.13940941 - 203.708256741 - 13775.9951584) / 47679.8216376
=-0.1182

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 -2.84 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 1.35270.86391.0733035.20360.152314893.38610.19626.38211.2586
GMI 1.01550.90331.11281.03680.9730.88611.08570.94471.0210.9518
AQI 1.07040.88191.0051.05250.91830.93190.78941.17840.99090.379
SGI 1.0031.21521.01991.00940.91271.52981.00621.23461.15241.2113
DEPI 0.89881.04190.96590.93681.09961.23651.0241.02661.06560.8371
SGAI 0.86120.79310.99931.20931.12220.81211.00990.99960.89590.8038
LVGI 0.62952.01270.51451.17251.16551.1760.99190.85252.17430.893
TATA -0.1277-0.1355-0.1395-0.2216-0.1211-0.1081-0.15-0.1286-0.1362-0.1164
M-score -2.58-3.44-2.83-4.4928.23-3.3813,697.78-3.521.62-2.82

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.15761.11921.09781.02320.98971.15450.97230.9611.22611.2143
GMI 0.98030.94520.94810.96130.99891.02091.00230.99940.98490.9517
AQI 0.68751.17841.41771.4021.56410.99090.96350.41580.38650.379
SGI 1.0981.18851.24941.27451.22191.16841.13391.12551.15941.2467
DEPI 1.04131.05841.02191.02571.00671.05381.05591.0140.9380.818
SGAI 1.05631.00030.89020.89060.88370.89590.92480.86950.8360.8057
LVGI 1.27870.85251.36691.25561.36282.17431.10890.96240.93380.893
TATA -0.1356-0.1269-0.1283-0.1162-0.1277-0.1357-0.1437-0.1371-0.1162-0.1182
M-score -3.11-2.70-2.73-2.68-2.76-3.18-3.09-3.25-2.89-2.84
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