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Exar Corp (NYSE:EXAR)
Beneish M-Score
-2.12 (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 -2.12 signals that the company is a manipulator.

EXAR' s 10-Year Beneish M-Score Range
Min: -4.22   Max: 4.06
Current: -2.12

-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 -2.70.


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 * 1.2266+0.528 * 1.6681+0.404 * 2.1892+0.892 * 1.0292+0.115 * 1.1614
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0741+4.679 * -0.0701-0.327 * 2.182
=-2.12

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $37.4 Mil.
Total Current Liabilities was $97.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -23.352 + -12.105 + 0.147 + -1.634 = $-36.9 Mil.
Non Operating Income was 0 + 0 + -0.323 + 0 = $-0.3 Mil.
Cash Flow from Operations was -1.96 + -8.137 + 1.708 + -5.409 = $-13.8 Mil.
Accounts Receivable was $20.5 Mil.
Revenue was 34.018 + 32.627 + 31.154 + 30.999 = $128.8 Mil.
Gross Profit was 13.929 + 15.477 + 15.296 + 14.192 = $58.9 Mil.
Total Current Assets was $241.8 Mil.
Total Assets was $312.0 Mil.
Property, Plant and Equipment(Net PPE) was $9.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.1 Mil.
Selling, General & Admin. Expense(SGA) was $33.8 Mil.
Total Current Liabilities was $42.1 Mil.
Long-Term Debt was $0.5 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)
=(25.828 / 132.555) / (20.459 / 128.798)
=0.19484742 / 0.15884563
=1.2266

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)
=(10.956 / 128.798) / (4.132 / 132.555)
=0.45725865 / 0.27412018
=1.6681

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 - (168.859 + 17.212) / 325.721) / (1 - (241.77 + 9.153) / 312.032)
=0.42874116 / 0.19584209
=2.1892

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
=132.555 / 128.798
=1.0292

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))
=(11.071 / (11.071 + 9.153)) / (15.346 / (15.346 + 17.212))
=0.54741891 / 0.47134345
=1.1614

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)
=(37.408 / 132.555) / (33.84 / 128.798)
=0.28220739 / 0.262737
=1.0741

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)
=((0.019 + 96.987) / 325.721) / ((0.456 + 42.133) / 312.032)
=0.2978193 / 0.13648921
=2.182

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
=(-36.944 - -0.323 - -13.798) / 325.721
=-0.0701

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 -2.12 signals that the company is likely to 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 0.63451.63090.5752.38730.5281.64130.67370.72891.59651.1597
GMI 0.95851.0060.99881.51981.02410.92881.07211.02330.93861.1291
AQI 1.12661.91290.97353.12260.15134.41490.57310.77421.59662.4298
SGI 0.85381.16831.02211.31011.28281.17161.08250.89430.93461.027
DEPI 0.8910.94930.99980.79840.84720.77610.9660.96881.12710.8186
SGAI 1.24780.88211.14541.16060.80141.07030.85580.95350.90180.9894
LVGI 0.83031.31210.98472.44611.54921.29791.00510.92910.91260.9866
TATA -0.0142-0.0087-0.0324-0.1035-0.2215-0.0943-0.1095-0.0947-0.01530.0174
M-score -2.98-1.51-3.03-0.80-4.19-0.97-3.33-3.32-1.79-1.60

Exar Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99111.35211.25881.59651.05861.11361.67861.15971.70921.2266
GMI 1.0231.04431.0330.93860.90980.90490.92981.12911.24361.6681
AQI 0.77330.65490.65121.59661.57194.33184.61182.42984.92412.1892
SGI 0.85690.8250.8690.93461.02091.09761.08281.0270.98411.0292
DEPI 1.16151.14360.91911.12710.68880.64020.62120.81861.31631.1614
SGAI 1.02711.060.97960.90180.85370.87820.93550.97171.11371.0741
LVGI 1.03881.07990.95630.91260.96360.96090.93420.98662.1772.182
TATA -0.0765-0.0676-0.0658-0.0153-0.0216-0.00450.01450.01740.0038-0.0701
M-score -3.05-2.76-2.78-1.79-2.32-1.02-0.30-1.59-0.48-2.12
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