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Analog Devices Inc (NAS:ADI)
Beneish M-Score
-2.86 (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.

Analog Devices Inc has a M-score of -2.85 suggests that the company is not a manipulator.

ADI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -0.6
Current: -2.86

-3.46
-0.6

During the past 13 years, the highest Beneish M-Score of Analog Devices Inc was -0.60. The lowest was -3.46. And the median was -2.64.


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 Analog Devices 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 * 1.0278+0.528 * 1.0104+0.404 * 0.8948+0.892 * 0.996+0.115 * 1.0343
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9672+4.679 * -0.0521-0.327 * 1.3844
=-2.85

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

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $478 Mil.
Revenue was 1003.623 + 869.591 + 778.766 + 769.429 = $3,421 Mil.
Gross Profit was 666.687 + 572.29 + 510.903 + 477.293 = $2,227 Mil.
Total Current Assets was $4,975 Mil.
Total Assets was $7,970 Mil.
Property, Plant and Equipment(Net PPE) was $636 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $461 Mil.
Total Current Liabilities was $783 Mil.
Long-Term Debt was $1,732 Mil.
Net Income was 296.157 + 230.43 + 170.573 + 164.504 = $862 Mil.
Non Operating Income was -1.897 + 0.504 + 0.743 + -3.005 = $-4 Mil.
Cash Flow from Operations was 486.984 + 254.003 + 320.203 + 219.705 = $1,281 Mil.
Accounts Receivable was $467 Mil.
Revenue was 978.722 + 863.365 + 821.019 + 771.986 = $3,435 Mil.
Gross Profit was 641.796 + 569.037 + 544.822 + 503.607 = $2,259 Mil.
Total Current Assets was $4,080 Mil.
Total Assets was $7,059 Mil.
Property, Plant and Equipment(Net PPE) was $644 Mil.
Depreciation, Depletion and Amortization(DDA) was $222 Mil.
Selling, General & Admin. Expense(SGA) was $479 Mil.
Total Current Liabilities was $1,114 Mil.
Long-Term Debt was $495 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)
=(477.609 / 3421.409) / (466.527 / 3435.092)
=0.13959424 / 0.13581208
=1.0278

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)
=(2259.262 / 3435.092) / (2227.173 / 3421.409)
=0.65770058 / 0.65095199
=1.0104

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 - (4974.863 + 636.116) / 7970.278) / (1 - (4079.548 + 644.11) / 7058.777)
=0.29601213 / 0.33081071
=0.8948

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
=3421.409 / 3435.092
=0.996

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))
=(222.24 / (222.24 + 644.11)) / (209.79 / (209.79 + 636.116))
=0.2565245 / 0.24800628
=1.0343

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)
=(461.438 / 3421.409) / (478.972 / 3435.092)
=0.13486783 / 0.13943498
=0.9672

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)
=((1732.177 + 782.934) / 7970.278) / ((495.341 + 1113.585) / 7058.777)
=0.31556126 / 0.22793269
=1.3844

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
=(861.664 - -3.655 - 1280.895) / 7970.278
=-0.0521

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.

Analog Devices Inc has a M-score of -2.85 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.

Analog Devices Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
DSRI 0.96670.92921.2240.93840.83021.0810.98111.12140.9811.0278
GMI 1.01211.00211.09990.8520.98181.02971.0031.00590.97141.0104
AQI 1.39110.95670.85030.72980.89690.96370.83465.62480.93560.8948
SGI 1.09541.0480.78011.37051.08390.90240.9751.08771.19910.996
DEPI 1.08741.02280.93821.1141.02881.10091.00760.96110.7241.0343
SGAI 0.92591.01841.02750.85530.96071.08041.02491.05490.87850.9672
LVGI 1.4980.9981.23521.06061.09740.89550.95381.020.98841.3844
TATA -0.11420.0378-0.055-0.065-0.0062-0.0293-0.0494-0.0352-0.0296-0.0521
M-score -2.94-2.34-2.82-2.68-2.66-2.60-2.80-0.60-2.51-2.85

Analog Devices Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.11011.12141.07380.9660.95420.9810.81710.90310.9661.0278
GMI 0.9731.00591.01331.01871.01940.97140.98340.98880.99191.0104
AQI 4.15455.62485.64945.39661.21330.93560.8660.90880.91830.8948
SGI 1.02951.08771.13971.17191.19861.19911.14091.08141.03850.996
DEPI 1.17650.96110.78830.6940.58590.7240.85480.95581.07251.0343
SGAI 1.05931.05491.05391.05940.92620.87850.85730.86670.93270.9672
LVGI 1.7531.021.0151.01530.560.98841.38611.43581.4381.3844
TATA -0.0284-0.0352-0.0329-0.0444-0.0364-0.0296-0.036-0.0375-0.0428-0.0521
M-score -1.46-0.60-0.59-0.83-2.31-2.51-2.87-2.84-2.84-2.85
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