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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 -3.24 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Taiwan Semiconductor Manufacturing Co Ltd was -1.69. The lowest was -4.28. And the median was -3.04.
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 * 0.9635||+||0.528 * 0.9998||+||0.404 * 0.4158||+||0.892 * 1.1251||+||0.115 * 1.0154|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8704||+||4.679 * -0.1368||-||0.327 * 0.9624|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $2,997 Mil.|
Revenue was 6110.92574043 + 4909.62107111 + 4838.26154765 + 5534.16053375 = $21,393 Mil.
Gross Profit was 3044.94056563 + 2331.66945981 + 2166.11338598 + 2685.46178984 = $10,228 Mil.
Total Current Assets was $15,333 Mil.
Total Assets was $44,911 Mil.
Property, Plant and Equipment(Net PPE) was $27,953 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,656 Mil.
Selling, General & Admin. Expense(SGA) was $778 Mil.
Total Current Liabilities was $8,235 Mil.
Long-Term Debt was $7,067 Mil.
Net Income was 1993.46502387 + 1585.49150465 + 1348.58826653 + 1768.45637744 = $6,696 Mil.
Non Operating Income was 139.759290794 + 31.8737124499 + 107.459649589 + 15.7999795759 = $295 Mil.
Cash Flow from Operations was 2729.60242412 + 3141.81899778 + 3410.30876692 + 3261.12628927 = $12,543 Mil.
|Accounts Receivable was $2,765 Mil.
Revenue was 5207.25877676 + 4450.95168807 + 4517.00635739 + 4838.90476028 = $19,014 Mil.
Gross Profit was 2552.76701072 + 2037.40939417 + 2133.70491409 + 2365.26684221 = $9,089 Mil.
Total Current Assets was $11,773 Mil.
Total Assets was $39,078 Mil.
Property, Plant and Equipment(Net PPE) was $23,903 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,926 Mil.
Selling, General & Admin. Expense(SGA) was $794 Mil.
Total Current Liabilities was $8,138 Mil.
Long-Term Debt was $5,697 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(2997.19529867 / 21392.9688929)||/||(2764.92821592 / 19014.1215825)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2331.66945981 / 19014.1215825)||/||(3044.94056563 / 21392.9688929)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (15332.717453 + 27953.1011386) / 44911.1745634)||/||(1 - (11773.4693857 + 23903.364933) / 39078.2461168)|
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.
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))|
|=||(4926.14653345 / (4926.14653345 + 23903.364933))||/||(5655.88628711 / (5655.88628711 + 27953.1011386))|
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)|
|=||(777.989924342 / 21392.9688929)||/||(794.462070505 / 19014.1215825)|
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)|
|=||((7067.1625096 + 8235.16902067) / 44911.1745634)||/||((5697.34602666 + 8138.13899188) / 39078.2461168)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(6696.00117249 - 294.892632409||-||12542.8564781)||/||44911.1745634|
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 -3.24 suggests that the company will not be a manipulator.
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
Taiwan Semiconductor Manufacturing Co Ltd Annual Data
Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data