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Analog Devices Inc (NAS:ADI)
Beneish M-Score
-2.87 (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 -2.87 suggests that the company is not a manipulator.

ADI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.49   Max: -0.59
Current: -2.87

-3.49
-0.59

During the past 13 years, the highest Beneish M-Score of Analog Devices Inc was -0.59. The lowest was -3.49. And the median was -2.62.


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 * 0.8171+0.528 * 0.9834+0.404 * 0.866+0.892 * 1.1409+0.115 * 0.8548
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8573+4.679 * -0.036-0.327 * 1.3861
=-2.87

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $375 Mil.
Revenue was 769.429 + 978.722 + 863.365 + 821.019 = $3,433 Mil.
Gross Profit was 477.293 + 641.796 + 569.037 + 544.822 = $2,233 Mil.
Total Current Assets was $4,644 Mil.
Total Assets was $7,598 Mil.
Property, Plant and Equipment(Net PPE) was $633 Mil.
Depreciation, Depletion and Amortization(DDA) was $217 Mil.
Selling, General & Admin. Expense(SGA) was $466 Mil.
Total Current Liabilities was $594 Mil.
Long-Term Debt was $1,731 Mil.
Net Income was 164.504 + 96.305 + 216.478 + 205.338 = $683 Mil.
Non Operating Income was -3.005 + 0.443 + -1.265 + 1.052 = $-3 Mil.
Cash Flow from Operations was 219.705 + 197.975 + 197.139 + 344.031 = $959 Mil.
Accounts Receivable was $402 Mil.
Revenue was 771.986 + 814.247 + 727.752 + 694.536 = $3,009 Mil.
Gross Profit was 503.607 + 486.037 + 476.29 + 458.743 = $1,925 Mil.
Total Current Assets was $3,803 Mil.
Total Assets was $6,821 Mil.
Property, Plant and Equipment(Net PPE) was $612 Mil.
Depreciation, Depletion and Amortization(DDA) was $171 Mil.
Selling, General & Admin. Expense(SGA) was $477 Mil.
Total Current Liabilities was $633 Mil.
Long-Term Debt was $873 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)
=(375.087 / 3432.535) / (402.35 / 3008.521)
=0.10927405 / 0.13373681
=0.8171

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)
=(641.796 / 3008.521) / (477.293 / 3432.535)
=0.63974192 / 0.65052447
=0.9834

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 - (4644.134 + 633.362) / 7598.081) / (1 - (3803.037 + 612.472) / 6821.156)
=0.30541725 / 0.35267439
=0.866

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
=3432.535 / 3008.521
=1.1409

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))
=(171.092 / (171.092 + 612.472)) / (217.284 / (217.284 + 633.362))
=0.21835102 / 0.25543411
=0.8548

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)
=(466.263 / 3432.535) / (476.669 / 3008.521)
=0.13583634 / 0.15843965
=0.8573

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)
=((1730.948 + 594.105) / 7598.081) / ((872.926 + 632.909) / 6821.156)
=0.30600529 / 0.2207595
=1.3861

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
=(682.625 - -2.775 - 958.85) / 7598.081
=-0.036

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 -2.87 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 own currency.

Analog Devices Inc Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
DSRI 0.90510.96670.92921.2240.93840.83021.0810.98111.12140.981
GMI 0.96911.01211.00211.09990.8520.98181.02971.0031.00590.9714
AQI 1.92751.39110.95670.85030.72980.89690.96370.83465.62480.9365
SGI 1.0541.09541.0480.78011.37051.08390.90240.9751.08771.1991
DEPI 0.86971.08741.02280.93821.1141.02881.10091.00760.96110.724
SGAI 1.09390.92591.01841.02750.85530.96071.08041.02491.05490.8785
LVGI 0.68921.4980.9981.23521.06061.09740.89550.95381.020.99
TATA -0.0201-0.10050.0388-0.055-0.065-0.0062-0.0293-0.0494-0.0352-0.0295
M-score -2.18-2.87-2.34-2.82-2.68-2.66-2.60-2.80-0.60-2.51

Analog Devices Inc Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 0.98111.0111.07431.11011.12141.07380.9660.95420.9810.8171
GMI 1.0030.99290.98050.9731.00591.01331.01871.01940.97140.9834
AQI 0.83460.86740.93974.15455.62485.64945.39661.21330.93650.866
SGI 0.9750.98681.00591.02951.08771.13971.17191.19861.19911.1409
DEPI 1.00761.05781.09291.17650.96110.78830.6940.58590.7240.8548
SGAI 1.02491.01810.99041.05931.05491.05391.05940.92620.87850.8573
LVGI 0.95380.98041.00921.7531.021.0151.01530.560.991.3861
TATA -0.0494-0.0458-0.039-0.0284-0.0352-0.0329-0.0444-0.0364-0.0295-0.036
M-score -2.80-2.74-2.61-1.46-0.60-0.59-0.83-2.31-2.51-2.87
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