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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-2.87 (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 -2.89 suggests that the company is not a manipulator.

TSM' s 10-Year Beneish M-Score Range
Min: -4.64   Max: 33915.64
Current: -2.87

-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 * 1.226+0.528 * 0.9855+0.404 * 0.3865+0.892 * 1.1595+0.115 * 0.938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8359+4.679 * -0.1162-0.327 * 0.9338
=-2.89

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $3,783 Mil.
Revenue was 6937.92200724 + 6102.57135712 + 4876.19042763 + 4906.93008781 = $22,824 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.
Net Income was 2533.44518934 + 1990.73971324 + 1574.69555921 + 1367.32685126 = $7,466 Mil.
Non Operating Income was 58.586240085 + 139.568222741 + 31.6566776316 + 108.952797497 = $339 Mil.
Cash Flow from Operations was 3028.27918091 + 2725.87072357 + 3120.42569079 + 3457.69488275 = $12,332 Mil.
Accounts Receivable was $2,662 Mil.
Revenue was 5486.5231408 + 5208.65067326 + 4463.22191965 + 4525.55982097 = $19,684 Mil.
Gross Profit was 2663.16075347 + 2553.44936349 + 2043.0260548 + 2137.74532622 = $9,397 Mil.
Total Current Assets was $11,417 Mil.
Total Assets was $39,751 Mil.
Property, Plant and Equipment(Net PPE) was $24,566 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,111 Mil.
Selling, General & Admin. Expense(SGA) was $799 Mil.
Total Current Liabilities was $5,006 Mil.
Long-Term Debt was $7,130 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)
=(3783.45999137 / 22823.6138798) / (2661.59366033 / 19683.9555547)
=0.16576954 / 0.1352164
=1.226

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)
=(3040.77775925 / 19683.9555547) / (3503.97809565 / 22823.6138798)
=0.47741327 / 0.48444387
=0.9855

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 - (15805.3233879 + 27357.5347317) / 44804.1830673) / (1 - (11417.1703406 + 24565.9124329) / 39750.8765149)
=0.0366333 / 0.09478517
=0.3865

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
=22823.6138798 / 19683.9555547
=1.1595

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))
=(5111.45326125 / (5111.45326125 + 24565.9124329)) / (6153.07630748 / (6153.07630748 + 27357.5347317))
=0.17223406 / 0.18361576
=0.938

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)
=(774.670406281 / 22823.6138798) / (799.279431509 / 19683.9555547)
=0.03394162 / 0.04060563
=0.8359

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)
=((7056.20616641 + 5716.6428927) / 44804.1830673) / ((7130.10721399 + 5005.71137292) / 39750.8765149)
=0.28508162 / 0.30529688
=0.9338

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
=(7466.20731305 - 338.763937954 - 12332.270478) / 44804.1830673
=-0.1162

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 -2.89 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.83771.35270.86391.0733035.20362422.74370.93210.19686.3884
GMI 0.81941.01550.90331.11281.03680.9730.88611.08610.94321.0222
AQI 1.57661.07040.88191.0051.05250.91830.93190.78941.28380.9095
SGI 1.34581.0031.21521.01991.00940.91271.52981.00621.23581.1513
DEPI 1.15830.89881.04190.96590.93681.09961.23651.0241.02661.0655
SGAI 1.07380.86120.79310.99931.20931.12220.81211.00990.99830.897
LVGI 0.9950.62952.01270.51451.17251.09331.31740.82021.61941.317
TATA -0.1282-0.1277-0.1355-0.1395-0.2216-0.1211-0.1081-0.15-0.1321-0.1362
M-score -2.78-2.58-3.44-2.83-4.4928.262,225.36-3.22-3.741.87

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 24436.5671.14831.25311.09731.02270.99781.03550.97280.96141.226
GMI 1.05880.97950.94330.94710.96160.99921.02261.003510.9855
AQI 0.76780.71831.28381.41771.4021.49710.90950.96350.41580.3865
SGI 1.01781.09861.18911.24991.27511.22111.16771.13341.1251.1595
DEPI 0.94041.04131.05841.02191.02571.00661.05371.05591.0140.938
SGAI 1.0671.05540.99940.88980.89030.88450.89670.92540.870.8359
LVGI 1.04891.31251.61941.36691.25561.32771.3171.10890.96240.9338
TATA -0.1313-0.1315-0.1301-0.1318-0.121-0.1334-0.1358-0.1441-0.1371-0.1162
M-score 22,477.55-3.10-2.80-2.74-2.70-2.80-3.04-3.09-3.25-2.89
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