Switch to:
GuruFocus has detected 6 Warning Signs with Micron Technology Inc $MU.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Micron Technology Inc (NAS:MU)
Beneish M-Score
-2.65 (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.

Micron Technology Inc has a M-score of -2.65 suggests that the company is not a manipulator.

MU' s Beneish M-Score Range Over the Past 10 Years
Min: -14.31   Max: 4.67
Current: -2.65

-14.31
4.67

During the past 13 years, the highest Beneish M-Score of Micron Technology Inc was 4.67. The lowest was -14.31. And the median was -2.88.


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 Micron Technology Inc 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 * 1.3914+0.528 * 1.0182+0.404 * 0.6056+0.892 * 1.0725+0.115 * 1.355
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8759+4.679 * -0.0963-0.327 * 1.1637
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Feb17) TTM:Last Year (Feb16) TTM:
Accounts Receivable was $2,528 Mil.
Revenue was 4648 + 3970 + 3217 + 2898 = $14,733 Mil.
Gross Profit was 1704 + 1011 + 579 + 498 = $3,792 Mil.
Total Current Assets was $9,945 Mil.
Total Assets was $32,355 Mil.
Property, Plant and Equipment(Net PPE) was $19,098 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,243 Mil.
Selling, General & Admin. Expense(SGA) was $651 Mil.
Total Current Liabilities was $5,207 Mil.
Long-Term Debt was $11,336 Mil.
Net Income was 894 + 180 + -170 + -215 = $689 Mil.
Non Operating Income was 34 + -14 + -10 + -34 = $-24 Mil.
Cash Flow from Operations was 1405 + 1138 + 896 + 389 = $3,828 Mil.
Accounts Receivable was $1,694 Mil.
Revenue was 2934 + 3350 + 3600 + 3853 = $13,737 Mil.
Gross Profit was 579 + 849 + 970 + 1202 = $3,600 Mil.
Total Current Assets was $8,805 Mil.
Total Assets was $24,819 Mil.
Property, Plant and Equipment(Net PPE) was $11,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,894 Mil.
Selling, General & Admin. Expense(SGA) was $693 Mil.
Total Current Liabilities was $4,411 Mil.
Long-Term Debt was $6,494 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)
=(2528 / 14733) / (1694 / 13737)
=0.17158759 / 0.12331659
=1.3914

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)
=(3600 / 13737) / (3792 / 14733)
=0.26206595 / 0.25738139
=1.0182

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 - (9945 + 19098) / 32355) / (1 - (8805 + 11819) / 24819)
=0.10236439 / 0.16902373
=0.6056

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
=14733 / 13737
=1.0725

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))
=(2894 / (2894 + 11819)) / (3243 / (3243 + 19098))
=0.1966968 / 0.14515912
=1.355

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)
=(651 / 14733) / (693 / 13737)
=0.04418652 / 0.0504477
=0.8759

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)
=((11336 + 5207) / 32355) / ((6494 + 4411) / 24819)
=0.51129655 / 0.43938112
=1.1637

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
=(689 - -24 - 3828) / 32355
=-0.0963

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.

Micron Technology Inc has a M-score of -2.65 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 local exchange's currency.

Micron Technology Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 0.84881.35990.94040.87850.86150.90122.01250.67660.87581.0534
GMI 1.2027-20.12720.1028-0.28631.59951.70160.57750.61251.0321.5942
AQI 0.87360.71021.43151.33710.77291.10651.31861.15291.32870.5898
SGI 1.07891.02690.82231.7661.03610.9371.10191.80290.98990.7657
DEPI 1.03980.90690.8041.04511.03490.94081.21070.98110.96661.1959
SGAI 1.22860.72640.94620.84461.08221.11780.82260.69781.02741.1969
LVGI 1.6021.11321.23630.79430.99391.25251.21720.96290.97381.2074
TATA -0.0854-0.1954-0.2667-0.1182-0.1497-0.2224-0.0987-0.1173-0.0934-0.1231
M-score -3.12-14.31-4.33-2.91-3.06-3.36-2.03-2.69-2.89-3.15

Micron Technology Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
DSRI 0.60680.75170.8540.87580.95080.85691.01961.05341.2821.3914
GMI 0.75220.86730.94961.0321.16031.3051.47741.59421.44341.0182
AQI 1.21931.46091.55211.32871.19140.86260.65030.58980.54750.6056
SGI 1.49711.27331.12320.98990.88630.81050.760.76570.86971.0725
DEPI 0.96970.95030.98340.96660.99131.04161.10381.19591.21521.355
SGAI 0.78130.85650.90141.02741.09871.16481.2131.19691.04210.8759
LVGI 0.90350.86711.00530.97381.05991.08571.13891.20741.1881.1637
TATA -0.0932-0.0787-0.0825-0.0934-0.1077-0.1277-0.1078-0.1231-0.123-0.0963
M-score -2.81-2.65-2.68-2.89-3.01-3.32-3.14-3.15-2.90-2.65
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)
FEEDBACK