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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 -2.80 suggests that the company is not a manipulator.

TSM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.64   Max: 3443.25
Current: -2.77

-4.64
3443.25

During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was 3443.25. 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 * 1.127+0.528 * 1.0235+0.404 * 1.4199+0.892 * 0.9307+0.115 * 1.0471
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9903+4.679 * -0.1207-0.327 * 1.01
=-2.80

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $3,507 Mil.
Revenue was 6867.17789474 + 6244.60254577 + 6207.09336546 + 6504.68813419 = $25,824 Mil.
Gross Profit was 3539.75962848 + 2802.84950625 + 3016.87757125 + 3132.45553192 = $12,492 Mil.
Total Current Assets was $26,394 Mil.
Total Assets was $55,867 Mil.
Property, Plant and Equipment(Net PPE) was $27,117 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,859 Mil.
Selling, General & Admin. Expense(SGA) was $693 Mil.
Total Current Liabilities was $12,345 Mil.
Long-Term Debt was $5,613 Mil.
Net Income was 2244.77773994 + 1987.93070328 + 2107.75227581 + 2305.79666049 = $8,646 Mil.
Non Operating Income was 89.9942724458 + 80.9872834286 + -17.70820817 + 177.49387043 = $331 Mil.
Cash Flow from Operations was 3302.67464396 + 3729.32032012 + 4412.01408945 + 3616.19978879 = $15,060 Mil.
Accounts Receivable was $3,343 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.



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)
=(3506.85374613 / 25823.5619402) / (3343.31456201 / 27746.7944573)
=0.13580054 / 0.12049372
=1.127

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)
=(13737.7592127 / 27746.7944573) / (12491.9422379 / 25823.5619402)
=0.49511158 / 0.48374203
=1.0235

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 - (26393.9650464 + 27116.724613) / 55866.6117647) / (1 - (23670.271731 + 26852.79971) / 52069.4754387)
=0.04217048 / 0.02969886
=1.4199

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
=25823.5619402 / 27746.7944573
=0.9307

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))
=(7198.26929397 / (7198.26929397 + 26852.79971)) / (6859.363684 / (6859.363684 + 27116.724613))
=0.21139628 / 0.20188798
=1.0471

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)
=(693.264170592 / 25823.5619402) / (752.162995451 / 27746.7944573)
=0.02684619 / 0.0271081
=0.9903

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)
=((5613.08083591 + 12344.8623529) / 55866.6117647) / ((6558.99437508 + 10012.8726269) / 52069.4754387)
=0.32144321 / 0.31826453
=1.01

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
=(8646.25737952 - 330.767218134 - 15060.2088423) / 55866.6117647
=-0.1207

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 -2.80 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 0.86391.0733035.20362876.57920.88240.96261.17051.24970.6725
GMI 0.90331.11281.03680.9730.88611.08610.94441.0210.95181.0177
AQI 0.88191.0051.05250.91830.93190.78941.17840.99090.3791.0297
SGI 1.21521.01991.00940.91271.52981.00621.23461.15241.21131.0572
DEPI 1.04190.96590.93681.09961.23651.0241.02661.06560.83710.9508
SGAI 0.79310.99931.20931.12220.81211.00990.99960.89590.80380.863
LVGI 2.01270.51451.17251.16551.1760.99190.85252.17430.8930.8865
TATA -0.1354-0.1396-0.2216-0.1211-0.1081-0.15-0.1286-0.1362-0.1164-0.1548
M-score -3.44-2.83-4.4928.232,642.93-3.32-2.81-3.18-2.83-3.38

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.9730.96121.22571.21430.97030.89360.65750.67321.00231.127
GMI 1.00320.99970.98520.95170.95350.96540.98991.01761.04741.0235
AQI 0.96350.41580.38650.3790.38630.82060.89591.02971.18231.4199
SGI 1.13361.12521.15981.24671.32831.29831.19671.05630.94140.9307
DEPI 1.05591.0140.9380.8180.77910.79650.84590.95231.00671.0471
SGAI 0.92520.86980.83570.80570.74990.74570.78620.86160.94710.9903
LVGI 1.10890.96240.93380.8930.86560.93410.87610.88650.93651.01
TATA -0.1437-0.1371-0.1162-0.1182-0.133-0.1429-0.1736-0.1589-0.1383-0.1207
M-score -3.09-3.25-2.89-2.84-3.05-3.03-3.42-3.40-3.05-2.80
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