Splunk Beneish M Score

SPLK
 Stock
  

USD 83.72  0.88  1.04%   

This module uses fundamental data of Splunk to approximate the value of its Beneish M Score. Splunk M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Additionally, take a look at Splunk Piotroski F Score and Splunk Altman Z Score analysis.
  
Splunk Long Term Debt to Equity is increasing as compared to previous years. The last year's value of Long Term Debt to Equity was reported at 14.09. The current Debt to Equity Ratio is estimated to increase to 15.20, while Total Debt is projected to decrease to under 2 M. Splunk Accrued Expenses Turnover is decreasing as compared to previous years. The last year's value of Accrued Expenses Turnover was reported at 7.88. The current Cash and Equivalents Turnover is estimated to increase to 1.94, while Return on Investment is projected to decrease to (34.10) .
At this time, it appears that Splunk Inc is an unlikely manipulator. The earnings manipulation may begin if Splunk's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Splunk executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Splunk's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.24
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset Quality1.01Focus
Expense Coverage1.0Focus
Gross Margin Strengs1.19Focus
Accruals Factor1.0Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.08Focus
Financial Leverage Condition1.0Focus

Splunk Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Splunk's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense608.8 M564.2 M
Significantly Up
Increasing
Slightly volatile
Revenues2.9 B2.7 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables176.4 M163.5 M
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net131.1 M121.5 M
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations103.7 M128 M
Significantly Down
Decreasing
Very volatile
Liabilities Non Current174.5 M161.7 M
Significantly Up
Increasing
Slightly volatile
Current Liabilities2.3 B2.1 B
Significantly Up
Increasing
Slightly volatile
Total LiabilitiesB5.6 B
Significantly Up
Increasing
Slightly volatile
Investments Non Current1.8 M1.7 M
Fairly Up
Decreasing
Slightly volatile
Investments Current497.4 M526 M
Notably Down
Increasing
Slightly volatile
Investments706.1 M673.9 M
Sufficiently Up
Increasing
Stable
Gross Margin86.5772.5482
Fairly Up
Decreasing
Slightly volatile
Depreciation Amortization and Accretion18.9 M17.5 M
Significantly Up
Increasing
Slightly volatile
Debt Non Current1.2 M1.2 M
Slightly Down
Decreasing
Slightly volatile
Debt Current878.6 K883.8 K
Slightly Down
Decreasing
Slightly volatile
Total DebtM2.1 M
Slightly Down
Decreasing
Slightly volatile
Assets Non Current310.3 M287.6 M
Significantly Up
Increasing
Slightly volatile
Current Assets3.5 B3.3 B
Significantly Up
Increasing
Slightly volatile
Total Assets6.2 B5.8 B
Significantly Up
Increasing
Slightly volatile

Splunk Inc Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Splunk's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Splunk in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Splunk's degree of accounting gimmicks and manipulations.

About Splunk Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

18.93 Million

Splunk Depreciation Amortization and Accretion is increasing as compared to previous years. The last year's value of Depreciation Amortization and Accretion was reported at 17.54 Million

Splunk Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Splunk. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues1.27 B1.8 B2.36 B2.23 B2.67 B2.88 B
Total Assets2.04 B4.5 B5.44 B5.87 B5.79 B6.25 B
Current Assets1.63 B3.38 B2.82 B3.27 B3.28 B3.54 B
Total Liabilities1.24 B2.98 B3.44 B4.27 B5.57 B6.01 B
Current Liabilities868.82 M1.05 B1.31 B1.52 B2.1 B2.26 B
Operating Income(254.29 M)(251.17 M)(287.14 M)(780.19 M)(1.15 B)(1.18 B)
Net Cash Flow from Operations262.9 M296.45 M(287.64 M)(190.86 M)128.05 M103.68 M
Gross Margin79.8280.8881.7875.4572.5586.57

About Splunk Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Splunk Inc's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Splunk using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Splunk Inc based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Splunk Inc., together with its subsidiaries, provides software and cloud solutions that deliver and operationalize insights from the data generated by digital systems in the United States and internationally. Splunk Inc. was incorporated in 2003 and is headquartered in San Francisco, California. Splunk operates under SoftwareInfrastructure classification in the United States and is traded on NASDAQ Exchange. It employs 7000 people.

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Additionally, take a look at Splunk Piotroski F Score and Splunk Altman Z Score analysis. You can also try Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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Is Splunk's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Splunk. If investors know Splunk will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Splunk listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Splunk Inc is measured differently than its book value, which is the value of Splunk that is recorded on the company's balance sheet. Investors also form their own opinion of Splunk's value that differs from its market value or its book value, called intrinsic value, which is Splunk's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Splunk's market value can be influenced by many factors that don't directly affect Splunk's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Splunk's value and its price as these two are different measures arrived at by different means. Investors typically determine Splunk value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Splunk's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.