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Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
Beneish M-Score
-3.01 (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 -3.05 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: -3.01

-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 -3.00.


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 * 1.0023+0.528 * 1.0474+0.404 * 1.1823+0.892 * 0.9413+0.115 * 1.0067
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9472+4.679 * -0.1383-0.327 * 0.9365
=-3.05

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,980 Mil.
Revenue was 6244.60254577 + 6207.09336546 + 6504.68813419 + 6648.92297933 = $25,605 Mil.
Gross Profit was 2802.84950625 + 3016.87757125 + 3132.45553192 + 3226.8855791 = $12,179 Mil.
Total Current Assets was $24,933 Mil.
Total Assets was $52,981 Mil.
Property, Plant and Equipment(Net PPE) was $25,909 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,916 Mil.
Selling, General & Admin. Expense(SGA) was $697 Mil.
Total Current Liabilities was $7,239 Mil.
Long-Term Debt was $5,560 Mil.
Net Income was 1987.93070328 + 2107.75227581 + 2305.79666049 + 2570.29581011 = $8,972 Mil.
Non Operating Income was 80.9872834286 + -17.70820817 + 177.49387043 + 707.032319035 = $948 Mil.
Cash Flow from Operations was 3729.32032012 + 4412.01408945 + 3616.19978879 + 3594.61560868 = $15,352 Mil.
Accounts Receivable was $3,158 Mil.
Revenue was 7062.55905236 + 7098.44092384 + 6938.02840928 + 6102.71703901 = $27,202 Mil.
Gross Profit was 3480.77383565 + 3526.41763338 + 3503.87547708 + 3040.67459153 = $13,552 Mil.
Total Current Assets was $21,964 Mil.
Total Assets was $49,522 Mil.
Property, Plant and Equipment(Net PPE) was $25,867 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,964 Mil.
Selling, General & Admin. Expense(SGA) was $781 Mil.
Total Current Liabilities was $5,966 Mil.
Long-Term Debt was $6,809 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)
=(2979.62086573 / 25605.3070248) / (3158.09028507 / 27201.7454245)
=0.11636732 / 0.11609881
=1.0023

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)
=(13551.7415376 / 27201.7454245) / (12179.0681885 / 25605.3070248)
=0.49819382 / 0.47564625
=1.0474

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 - (24932.676648 + 25908.9540743) / 52981.3865482) / (1 - (21963.525011 + 25867.2533415) / 49522.3980699)
=0.04038694 / 0.03415868
=1.1823

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
=25605.3070248 / 27201.7454245
=0.9413

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))
=(6963.57640505 / (6963.57640505 + 25867.2533415)) / (6915.90481757 / (6915.90481757 + 25908.9540743))
=0.21210479 / 0.21069108
=1.0067

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)
=(696.624015514 / 25605.3070248) / (781.307201851 / 27201.7454245)
=0.02720624 / 0.02872269
=0.9472

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)
=((5559.85006475 + 7238.78624867) / 52981.3865482) / ((6808.54447774 + 5966.15407371) / 49522.3980699)
=0.24156854 / 0.257958
=0.9365

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
=(8971.7754497 - 947.805264723 - 15352.149807) / 52981.3865482
=-0.1383

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 -3.05 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 0.86391.0734035.29942848.15670.89741.06631.04931.24970.6725
GMI 0.90331.11261.0370.9730.88611.08610.94441.0210.95181.0177
AQI 0.88191.0051.05250.91830.93190.86621.16990.90950.3791.0297
SGI 1.21531.01981.01220.91031.52981.00621.23461.15241.21131.0572
DEPI 1.04190.96580.9351.10191.23651.0241.02661.06550.83710.9508
SGAI 0.79221.00051.20921.12230.81211.00990.99960.89590.80380.863
LVGI 2.01270.51451.17251.09331.25351.04161.34021.3170.8930.8865
TATA -0.1354-0.1396-0.2222-0.1211-0.1081-0.149-0.1277-0.1362-0.1164-0.1548
M-score -3.44-2.83-4.4928.342,616.76-3.29-2.88-3.04-2.83-3.38

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0360.97350.99881.23371.21420.97020.86030.65340.67321.0023
GMI 1.02221.00320.99980.98530.95170.95360.96550.991.01761.0474
AQI 0.90950.96280.41510.38580.3790.38660.82210.89741.02971.1823
SGI 1.16721.13311.12471.15931.24671.32841.29841.19681.05630.9413
DEPI 1.05371.05591.0140.9380.8180.77910.79650.84590.95231.0067
SGAI 0.89710.92560.87030.83610.80570.74990.74560.78610.86160.9472
LVGI 1.3171.10890.96240.93380.8930.86560.9340.87610.88650.9365
TATA -0.1344-0.1431-0.1362-0.1153-0.1186-0.133-0.1429-0.1736-0.1589-0.1383
M-score -3.03-3.08-3.21-2.88-2.85-3.05-3.06-3.42-3.40-3.05
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