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Exar Corp (NYSE:EXAR)
Beneish M-Score
-2.61 (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 -2.61 suggests that the company is not a manipulator.

EXAR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.22   Max: 4.06
Current: -2.61

-4.22
4.06

During the past 13 years, the highest Beneish M-Score of Exar Corp was 4.06. The lowest was -4.22. And the median was -2.66.


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 * 0.8335+0.528 * 0.6896+0.404 * 1.0847+0.892 * 1.2322+0.115 * 1.0306
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8928+4.679 * -0.0452-0.327 * 0.5796
=-2.61

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $26.5 Mil.
Revenue was 34.742 + 40.422 + 43.857 + 44.315 = $163.3 Mil.
Gross Profit was 12.656 + 17.437 + 17.948 + 16.89 = $64.9 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 $19.7 Mil.
Selling, General & Admin. Expense(SGA) was $41.5 Mil.
Total Current Liabilities was $42.2 Mil.
Long-Term Debt was $4.2 Mil.
Net Income was -4.197 + -2.51 + -2.914 + -6.599 = $-16.2 Mil.
Non Operating Income was 0 + 0 + -0.544 + 0 = $-0.5 Mil.
Cash Flow from Operations was -1.539 + 1.562 + 2.37 + -5.914 = $-3.5 Mil.
Accounts Receivable was $25.8 Mil.
Revenue was 43.159 + 30.719 + 27.987 + 30.69 = $132.6 Mil.
Gross Profit was 4.132 + 10.956 + 8.422 + 12.826 = $36.3 Mil.
Total Current Assets was $168.9 Mil.
Total Assets was $325.7 Mil.
Property, Plant and Equipment(Net PPE) was $17.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.3 Mil.
Selling, General & Admin. Expense(SGA) was $37.7 Mil.
Total Current Liabilities was $97.0 Mil.
Long-Term Debt was $0.0 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)
=(26.527 / 163.336) / (25.828 / 132.555)
=0.16240755 / 0.19484742
=0.8335

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)
=(17.437 / 132.555) / (12.656 / 163.336)
=0.27412018 / 0.39753024
=0.6896

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 - (120.444 + 23.327) / 268.759) / (1 - (168.859 + 17.212) / 325.721)
=0.46505605 / 0.42874116
=1.0847

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
=163.336 / 132.555
=1.2322

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))
=(15.346 / (15.346 + 17.212)) / (19.661 / (19.661 + 23.327))
=0.47134345 / 0.45736019
=1.0306

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)
=(41.475 / 163.336) / (37.699 / 132.555)
=0.25392443 / 0.2844027
=0.8928

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)
=((4.188 + 42.203) / 268.759) / ((0.019 + 96.987) / 325.721)
=0.17261189 / 0.2978193
=0.5796

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
=(-16.22 - -0.544 - -3.521) / 268.759
=-0.0452

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 -2.61 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.

Exar Corp Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 1.63090.5752.38730.5281.64130.67370.72891.59651.15971.4135
GMI 1.0060.99881.51981.02410.92881.07211.02330.93861.12911.3119
AQI 1.91290.97353.12260.15134.41490.57310.77421.59662.42982.3506
SGI 1.16831.02211.31011.28281.17161.08250.89430.93461.0271.2931
DEPI 0.94930.99980.79840.84720.77610.9660.96881.12710.81860.9137
SGAI 0.88211.14541.16060.80141.07030.85580.95350.90180.98941.0238
LVGI 1.31210.98472.44611.54921.29791.00510.92910.91260.98661.4129
TATA -0.0087-0.0324-0.1035-0.2215-0.0943-0.1095-0.0947-0.01530.0174-0.1087
M-score -1.51-3.03-0.80-4.19-0.97-3.33-3.32-1.79-1.60-1.79

Exar Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.11361.67861.15971.70921.22661.07831.41350.68720.83350.8819
GMI 0.90490.92981.12911.24361.66811.621.31191.13820.68960.6893
AQI 4.33184.61182.42984.92412.18922.56242.35061.22361.08470.95
SGI 1.09761.08281.0270.98411.02921.13771.29311.39171.23221.0703
DEPI 0.87980.86080.81861.31631.16141.27790.91370.87671.03061.1001
SGAI 0.87820.92850.98941.12291.08251.05051.01670.89080.89280.9182
LVGI 0.96090.93420.98662.1772.1821.41721.41290.63710.57960.8028
TATA -0.00450.01450.01740.0038-0.0701-0.0983-0.1087-0.1107-0.0452-0.0724
M-score -0.99-0.27-1.60-0.48-2.12-1.90-1.78-2.65-2.61-2.96
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