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GuruFocus has detected 6 Warning Signs with Symantec Corp $SYMC.
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Symantec Corp (NAS:SYMC)
Beneish M-Score
-2.00 (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.

Symantec Corp has a M-score of -2.00 signals that the company is a manipulator.

SYMC' s Beneish M-Score Range Over the Past 10 Years
Min: -6.36   Max: -0.74
Current: -2

-6.36
-0.74

During the past 13 years, the highest Beneish M-Score of Symantec Corp was -0.74. The lowest was -6.36. And the median was -2.75.


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 Symantec 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 * 1.0456+0.528 * 1.0526+0.404 * 2.0029+0.892 * 1.1164+0.115 * 0.6673
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1418+4.679 * 0.0049-0.327 * 1.193
=-2.00

* 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 $649 Mil.
Revenue was 1115 + 1041 + 979 + 884 = $4,019 Mil.
Gross Profit was 856 + 806 + 769 + 735 = $3,166 Mil.
Total Current Assets was $5,324 Mil.
Total Assets was $18,174 Mil.
Property, Plant and Equipment(Net PPE) was $937 Mil.
Depreciation, Depletion and Amortization(DDA) was $530 Mil.
Selling, General & Admin. Expense(SGA) was $2,023 Mil.
Total Current Liabilities was $4,622 Mil.
Long-Term Debt was $6,876 Mil.
Net Income was -143 + 46 + -144 + 135 = $-106 Mil.
Non Operating Income was -3 + 5 + 10 + 13 = $25 Mil.
Cash Flow from Operations was 353 + 144 + 55 + -772 = $-220 Mil.
Accounts Receivable was $556 Mil.
Revenue was 873 + 909 + 906 + 912 = $3,600 Mil.
Gross Profit was 726 + 759 + 746 + 754 = $2,985 Mil.
Total Current Assets was $6,959 Mil.
Total Assets was $11,767 Mil.
Property, Plant and Equipment(Net PPE) was $957 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $1,587 Mil.
Total Current Liabilities was $4,033 Mil.
Long-Term Debt was $2,207 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)
=(649 / 4019) / (556 / 3600)
=0.16148296 / 0.15444444
=1.0456

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)
=(2985 / 3600) / (3166 / 4019)
=0.82916667 / 0.78775815
=1.0526

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 - (5324 + 937) / 18174) / (1 - (6959 + 957) / 11767)
=0.65549686 / 0.32727118
=2.0029

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
=4019 / 3600
=1.1164

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))
=(304 / (304 + 957)) / (530 / (530 + 937))
=0.24107851 / 0.36128153
=0.6673

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)
=(2023 / 4019) / (1587 / 3600)
=0.50335904 / 0.44083333
=1.1418

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)
=((6876 + 4622) / 18174) / ((2207 + 4033) / 11767)
=0.63266204 / 0.53029659
=1.193

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
=(-106 - 25 - -220) / 18174
=0.0049

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.

Symantec Corp has a M-score of -2.00 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.

Symantec Corp Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DSRI 1.00621.05451.05091.14420.86891.04991.61250.55691.15191.0456
GMI 0.98750.98970.98170.9810.99041.01131.02340.9890.98891.0526
AQI 1.04140.81060.88231.06930.9910.85841.0411.03670.63122.0029
SGI 1.12981.04690.97321.03431.08721.02620.60571.24810.68951.1164
DEPI 0.94440.92211.6170.79781.01861.02761.46480.90971.12840.6673
SGAI 1.0520.94341.02391.07070.98540.97751.11530.86860.97111.1418
LVGI 1.06831.52181.01221.07690.92921.05060.89530.99081.1321.193
TATA -0.0784-0.7944-0.0921-0.0903-0.0927-0.0596-0.0309-0.03360.14380.0049
M-score -2.75-6.36-2.88-2.78-2.94-2.75-2.32-2.80-2.12-2.00

Symantec Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 2.16710.55690.84391.16130.47531.15190.64010.62911.09131.0456
GMI 1.03290.9890.9870.99080.97380.98890.98830.99751.02311.0526
AQI 0.98661.03671.0031.01380.62240.63120.64671.06991.76412.0029
SGI 0.5081.24811.04490.88021.04980.68950.81220.98861.04161.1164
DEPI 1.83550.90971.07011.19070.72741.12840.83810.65940.7450.6673
SGAI 1.2360.86860.90610.96260.83880.97110.92510.91441.00481.1418
LVGI 0.9690.99080.98410.97661.02221.1321.13211.36251.27451.193
TATA -0.0272-0.0336-0.0441-0.0494-0.03520.14380.23960.15040.14160.0049
M-score -1.89-2.80-2.77-2.63-3.26-2.12-2.06-2.24-1.50-2.00
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