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GuruFocus has detected 6 Warning Signs with SodaStream International Ltd $SODA.
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SodaStream International Ltd (NAS:SODA)
Beneish M-Score
-2.83 (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.

SodaStream International Ltd has a M-score of -2.83 suggests that the company is not a manipulator.

SODA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -1.69
Current: -2.83

-3.28
-1.69

During the past 9 years, the highest Beneish M-Score of SodaStream International Ltd was -1.69. The lowest was -3.28. And the median was -2.41.


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 SodaStream International 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 * 0.9193+0.528 * 0.9211+0.404 * 0.9255+0.892 * 1.1577+0.115 * 0.9318
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8864+4.679 * -0.0974-0.327 * 0.711
=-2.83

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was USD 75.8 Mil.
Revenue was 115.292 + 131.8 + 124.228 + 119.164 = USD 490.5 Mil.
Gross Profit was 60.717 + 68.998 + 64.339 + 60.469 = USD 254.5 Mil.
Total Current Assets was USD 287.8 Mil.
Total Assets was USD 499.3 Mil.
Property, Plant and Equipment(Net PPE) was USD 166.0 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 19.3 Mil.
Selling, General & Admin. Expense(SGA) was USD 184.4 Mil.
Total Current Liabilities was USD 81.2 Mil.
Long-Term Debt was USD 0.0 Mil.
Net Income was 14.734 + 15.648 + 14.91 + 7.815 = USD 53.1 Mil.
Non Operating Income was 2.106 + -0.311 + -0.095 + -0.409 = USD 1.3 Mil.
Cash Flow from Operations was 31.532 + 16.14 + 29.999 + 22.756 = USD 100.4 Mil.
Accounts Receivable was USD 71.2 Mil.
Revenue was 100.873 + 112.942 + 110.015 + 99.834 = USD 423.7 Mil.
Gross Profit was 51.172 + 52.033 + 50.76 + 48.527 = USD 202.5 Mil.
Total Current Assets was USD 247.4 Mil.
Total Assets was USD 454.3 Mil.
Property, Plant and Equipment(Net PPE) was USD 162.1 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 17.4 Mil.
Selling, General & Admin. Expense(SGA) was USD 179.7 Mil.
Total Current Liabilities was USD 80.7 Mil.
Long-Term Debt was USD 23.2 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)
=(75.769 / 490.484) / (71.192 / 423.664)
=0.15447803 / 0.16803882
=0.9193

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)
=(202.492 / 423.664) / (254.523 / 490.484)
=0.47795423 / 0.51892213
=0.9211

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 - (287.775 + 166.025) / 499.293) / (1 - (247.435 + 162.103) / 454.259)
=0.09111484 / 0.09844824
=0.9255

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
=490.484 / 423.664
=1.1577

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))
=(17.376 / (17.376 + 162.103)) / (19.251 / (19.251 + 166.025))
=0.09681355 / 0.10390445
=0.9318

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)
=(184.376 / 490.484) / (179.667 / 423.664)
=0.37590625 / 0.42407899
=0.8864

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)
=((0 + 81.234) / 499.293) / ((23.221 + 80.729) / 454.259)
=0.16269806 / 0.22883421
=0.711

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
=(53.107 - 1.291 - 100.427) / 499.293
=-0.0974

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.

SodaStream International Ltd has a M-score of -2.83 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.

SodaStream International Ltd Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.79260.98171.1090.83591.00670.9909
GMI 0.99021.00881.06511.02621.03830.9256
AQI 0.99871.2220.95010.94670.99570.9893
SGI 1.42871.511.28970.90950.80731.1523
DEPI 0.90740.97640.94751.02171.22160.9309
SGAI 0.95440.98060.96331.04881.0060.8786
LVGI 0.77741.20220.93651.03590.80930.6303
TATA 0.11430.01860.0835-0.0491-0.007-0.0748
M-score -1.69-1.93-1.70-2.97-2.57-2.61

SodaStream International Ltd Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.83590.77780.82120.96541.00671.2311.11020.97430.99090.9193
GMI 1.02621.02851.02211.03561.03831.02330.99870.9410.92560.9211
AQI 0.94670.98411.0141.02340.99570.94150.90710.94030.98930.9255
SGI 0.90950.85920.77370.77110.80730.87541.00091.07141.15231.1577
DEPI 1.02171.05690.99451.1381.22161.16461.15471.06780.93090.9318
SGAI 1.04880.99471.02111.00251.0060.9920.94040.9050.87860.8864
LVGI 1.03590.99540.9440.96150.80930.8390.81120.73460.63030.711
TATA -0.0491-0.0505-0.0986-0.0943-0.007-0.0189-0.0234-0.0283-0.0748-0.0974
M-score -2.97-3.03-3.28-3.10-2.57-2.41-2.44-2.52-2.61-2.83
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