Switch to:
Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-3.03 (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 -3.06 suggests that the company is not a manipulator.

TSM' s 10-Year Beneish M-Score Range
Min: -4.64   Max: 33915.64
Current: -3.03

-4.64
33915.64

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was 33915.64. The lowest was -4.64. And the median was -3.01.


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 * 0.8563+0.528 * 0.9654+0.404 * 0.8221+0.892 * 1.2983+0.115 * 0.7965
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7456+4.679 * -0.1429-0.327 * 0.934
=-3.06

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $3,204 Mil.
Revenue was 6648.92297933 + 7061.93729285 + 7098.01217789 + 6937.92200724 = $27,747 Mil.
Gross Profit was 3226.8855791 + 3480.77383565 + 3526.12170235 + 3503.97809565 = $13,738 Mil.
Total Current Assets was $23,670 Mil.
Total Assets was $52,069 Mil.
Property, Plant and Equipment(Net PPE) was $26,853 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,198 Mil.
Selling, General & Admin. Expense(SGA) was $752 Mil.
Total Current Liabilities was $10,013 Mil.
Long-Term Debt was $6,559 Mil.
Net Income was 2570.29581011 + 2512.54559739 + 2245.25894762 + 2533.44518934 = $9,862 Mil.
Non Operating Income was 707.032319035 + 77.1926827872 + -26.1028837168 + 58.586240085 = $817 Mil.
Cash Flow from Operations was 3594.61560868 + 4962.13717706 + 4901.41956309 + 3028.27918091 = $16,486 Mil.
Accounts Receivable was $2,882 Mil.
Revenue was 6102.71703901 + 4876.19042763 + 4906.22692864 + 5486.5231408 = $21,372 Mil.
Gross Profit was 3040.67459153 + 2315.69092105 + 2196.21145241 + 2663.16075347 = $10,216 Mil.
Total Current Assets was $15,312 Mil.
Total Assets was $44,847 Mil.
Property, Plant and Equipment(Net PPE) was $27,915 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,652 Mil.
Selling, General & Admin. Expense(SGA) was $777 Mil.
Total Current Liabilities was $8,224 Mil.
Long-Term Debt was $7,058 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)
=(3203.82268223 / 27746.7944573) / (2881.77485829 / 21371.6575361)
=0.11546641 / 0.13484096
=0.8563

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)
=(3480.77383565 / 21371.6575361) / (3226.8855791 / 27746.7944573)
=0.478004 / 0.49511158
=0.9654

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 - (23670.271731 + 26852.79971) / 52069.4754387) / (1 - (15311.7557519 + 27914.8858286) / 44846.8392798)
=0.02969886 / 0.03612736
=0.8221

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
=27746.7944573 / 21371.6575361
=1.2983

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))
=(5651.94306364 / (5651.94306364 + 27914.8858286)) / (7198.26929397 / (7198.26929397 + 26852.79971))
=0.16837882 / 0.21139628
=0.7965

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)
=(752.162995451 / 27746.7944573) / (776.996638215 / 21371.6575361)
=0.0271081 / 0.03635641
=0.7456

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)
=((6558.99437508 + 10012.8726269) / 52069.4754387) / ((7057.50083361 + 8223.91053685) / 44846.8392798)
=0.31826453 / 0.34074668
=0.934

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
=(9861.54554447 - 816.70835819 - 16486.4515297) / 52069.4754387
=-0.1429

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 -3.06 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 1.35270.86391.0733035.20362422.74371.05920.17326.38861.2586
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 -2.58-3.44-2.83-4.4928.262,225.36-3.10-3.761.88-2.82

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.09731.02270.99781.03560.97280.96151.2261.21420.97230.8563
GMI 0.94710.96160.99921.02261.003410.98550.95170.95360.9654
AQI 1.41771.4021.49710.90950.96280.41510.38650.3790.38660.8221
SGI 1.24991.27511.22111.16771.13331.12491.15951.24671.32831.2983
DEPI 1.02191.02571.00661.05371.05591.0140.9380.8180.77910.7965
SGAI 0.88980.89030.88450.89670.92540.87010.83590.80570.74990.7456
LVGI 1.36691.25561.32771.3171.10890.96240.93380.8930.86560.934
TATA -0.1318-0.121-0.1334-0.1344-0.1431-0.1361-0.1152-0.1186-0.133-0.1429
M-score -2.74-2.70-2.80-3.03-3.09-3.24-2.88-2.85-3.05-3.06
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK