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Exar Corp (NYSE:EXAR)
Beneish M-Score
-3.40 (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.

Exar Corp has a M-score of -3.38 suggests that the company is not a manipulator.

EXAR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.47   Max: 4.06
Current: -3.4

-6.47
4.06

During the past 13 years, the highest Beneish M-Score of Exar Corp was 4.06. The lowest was -6.47. And the median was -2.71.


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 Exar 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 * 0.6382+0.528 * 0.9311+0.404 * 0.3316+0.892 * 0.927+0.115 * 0.4845
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9963+4.679 * -0.0466-0.327 * 0.7502
=-3.38

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $15.7 Mil.
Revenue was 27.601 + 27.136 + 36.775 + 37.439 = $129.0 Mil.
Gross Profit was 13.193 + 13.362 + 14.773 + 14.692 = $56.0 Mil.
Total Current Assets was $230.2 Mil.
Total Assets was $278.1 Mil.
Property, Plant and Equipment(Net PPE) was $5.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $34.2 Mil.
Total Current Liabilities was $35.6 Mil.
Long-Term Debt was $0.4 Mil.
Net Income was 1.008 + 8.94 + -2.182 + -7.137 = $0.6 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 5.536 + 4.144 + 2.821 + 1.081 = $13.6 Mil.
Accounts Receivable was $26.5 Mil.
Revenue was 22.755 + 28.183 + 43.857 + 44.315 = $139.1 Mil.
Gross Profit was 8.553 + 12.878 + 17.948 + 16.89 = $56.3 Mil.
Total Current Assets was $120.4 Mil.
Total Assets was $268.8 Mil.
Property, Plant and Equipment(Net PPE) was $23.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.3 Mil.
Selling, General & Admin. Expense(SGA) was $37.0 Mil.
Total Current Liabilities was $42.2 Mil.
Long-Term Debt was $4.2 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)
=(15.693 / 128.951) / (26.527 / 139.11)
=0.12169739 / 0.19069082
=0.6382

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)
=(56.269 / 139.11) / (56.02 / 128.951)
=0.40449285 / 0.43442858
=0.9311

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 - (230.249 + 4.984) / 278.125) / (1 - (120.444 + 23.327) / 268.759)
=0.15421843 / 0.46505605
=0.3316

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
=128.951 / 139.11
=0.927

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))
=(14.329 / (14.329 + 23.327)) / (18.238 / (18.238 + 4.984))
=0.38052369 / 0.78537594
=0.4845

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)
=(34.166 / 128.951) / (36.993 / 139.11)
=0.26495335 / 0.26592625
=0.9963

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)
=((0.428 + 35.589) / 278.125) / ((4.188 + 42.203) / 268.759)
=0.12949933 / 0.17261189
=0.7502

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
=(0.629 - 0 - 13.582) / 278.125
=-0.0466

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.

Exar Corp has a M-score of -3.38 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.

Exar Corp Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.5752.38730.5281.64130.67370.72891.59651.15971.41350.6373
GMI 0.99881.51981.02410.92881.07211.02330.93861.12911.31190.7727
AQI 0.97353.12260.15134.41490.57310.77421.59662.42982.35060.3513
SGI 1.02211.31011.28281.17161.08250.89430.93461.0271.29310.9218
DEPI 0.99980.79840.84720.77610.9660.96881.12710.81860.91370.8465
SGAI 1.14541.16060.80141.07030.85580.95350.90180.98941.02380.9727
LVGI 0.98472.44611.54921.29791.00510.92910.91260.98661.41290.7421
TATA -0.0324-0.4929-0.2215-0.0943-0.1095-0.0947-0.01530.0174-0.1087-0.0781
M-score -3.03-2.63-4.19-0.97-3.33-3.32-1.79-1.60-1.79-3.56

Exar Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.70921.22661.07831.41350.73990.97871.04350.76060.78530.6382
GMI 1.24361.66811.621.31191.150.67770.67590.75760.78510.9311
AQI 4.92412.18922.56242.35061.22361.08470.950.35130.33330.3316
SGI 0.98411.02921.13771.29311.29251.04950.90460.77230.7780.927
DEPI 1.31631.16141.27790.91370.94811.23870.94190.84650.52710.4845
SGAI 1.12291.08251.05051.01670.90340.9350.96461.03561.04180.9963
LVGI 2.1772.1821.41721.41290.63710.57960.80280.74210.74630.7502
TATA 0.0038-0.0701-0.0983-0.1087-0.1107-0.0452-0.0766-0.0781-0.0411-0.0466
M-score -0.48-2.12-1.90-1.78-2.68-2.63-3.01-3.60-3.43-3.38
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