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GuruFocus has detected 5 Warning Signs with SunPower Corp $SPWR.
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SunPower Corp (NAS:SPWR)
Beneish M-Score
-1.54 (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.

SunPower Corp has a M-score of -1.54 signals that the company is a manipulator.

SPWR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.68   Max: 0.34
Current: -1.54

-3.68
0.34

During the past 13 years, the highest Beneish M-Score of SunPower Corp was 0.34. The lowest was -3.68. And the median was -2.44.


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 SunPower Corp 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 * 0.5589+0.528 * 3.2338+0.404 * 0.6243+0.892 * 1.6927+0.115 * 1.7468
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.482+4.679 * -0.095-0.327 * 1.1047
=-1.54

* 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 $168 Mil.
Revenue was 399.076 + 1024.889 + 729.346 + 420.452 = $2,574 Mil.
Gross Profit was -30.932 + -32.073 + 129.208 + 41.294 = $107 Mil.
Total Current Assets was $1,650 Mil.
Total Assets was $4,326 Mil.
Property, Plant and Equipment(Net PPE) was $1,754 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $299 Mil.
Total Current Liabilities was $815 Mil.
Long-Term Debt was $1,972 Mil.
Net Income was -134.479 + -275.118 + -40.545 + -69.992 = $-520 Mil.
Non Operating Income was -2.19 + 8.184 + -40.228 + -5.822 = $-40 Mil.
Cash Flow from Operations was -126.893 + 486.055 + -128.346 + -300.091 = $-69 Mil.
Accounts Receivable was $177 Mil.
Revenue was 384.875 + 374.364 + 380.218 + 381.02 = $1,520 Mil.
Gross Profit was 51.537 + 20.303 + 62.644 + 70.881 = $205 Mil.
Total Current Assets was $2,374 Mil.
Total Assets was $4,835 Mil.
Property, Plant and Equipment(Net PPE) was $809 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $366 Mil.
Total Current Liabilities was $1,055 Mil.
Long-Term Debt was $1,765 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)
=(167.861 / 2573.763) / (177.443 / 1520.477)
=0.06522007 / 0.11670219
=0.5589

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)
=(205.365 / 1520.477) / (107.497 / 2573.763)
=0.13506617 / 0.04176647
=3.2338

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 - (1649.694 + 1753.746) / 4326.393) / (1 - (2373.9 + 808.844) / 4834.855)
=0.21333083 / 0.34170849
=0.6243

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
=2573.763 / 1520.477
=1.6927

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))
=(151.561 / (151.561 + 808.844)) / (174.176 / (174.176 + 1753.746))
=0.15780947 / 0.0903439
=1.7468

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)
=(298.673 / 2573.763) / (366.063 / 1520.477)
=0.11604526 / 0.24075537
=0.482

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)
=((1972.095 + 815.27) / 4326.393) / ((1765.293 + 1054.545) / 4834.855)
=0.64426995 / 0.58323114
=1.1047

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
=(-520.134 - -40.056 - -69.275) / 4326.393
=-0.095

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.

SunPower Corp has a M-score of -1.54 signals that the company is likely to 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.

SunPower Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.04780.68221.04511.05221.07550.89150.87331.15830.72520.7103
GMI 1.11860.78441.30660.81012.41160.93480.52040.94851.33072.0909
AQI 1.92471.03540.91571.09750.57531.09631.1261.45950.71650.9605
SGI 3.27591.85551.06031.45591.06991.01821.03711.20740.52081.6236
DEPI 0.71261.26930.80710.65991.16071.27711.32140.65121.56181.0459
SGAI 1.52450.8651.03271.16230.96210.91950.84370.87962.3010.5866
LVGI 4.09511.04510.97030.97441.27320.98641.03820.84931.2051.12
TATA 0.0089-0.0191-0.0388-0.0256-0.1466-0.1263-0.01340.05460.1099-0.0251
M-score -1.06-2.16-2.46-2.26-2.52-3.10-2.78-1.71-2.81-1.71

SunPower Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.15831.62851.17440.42080.72520.69240.82921.33990.71030.5589
GMI 0.94851.16431.16430.97051.33071.47491.77461.61062.09093.2338
AQI 1.45951.03150.80681.40440.71651.41520.93520.66330.96050.6243
SGI 1.20741.08251.06140.94610.52080.54780.58890.80671.62361.6927
DEPI 0.65121.04091.67980.94751.56180.61020.93831.22321.04591.7468
SGAI 0.87960.97850.99791.14592.3012.29172.07861.45190.58660.482
LVGI 0.84930.94670.92780.92641.2051.22231.23741.23581.121.1047
TATA 0.05460.08050.08910.08540.10990.14850.14420.1623-0.0251-0.095
M-score -1.71-1.33-1.74-2.52-2.81-2.39-2.22-1.52-1.71-1.54
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