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Exar Corp (NYSE:EXAR)
Beneish M-Score
-3.00 (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 -3.00 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

-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 -2.70.


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 * 0.8819+0.528 * 0.6893+0.404 * 0.95+0.892 * 1.0703+0.115 * 0.9419
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9182+4.679 * -0.0766-0.327 * 0.8028
=-3.00

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $27.1 Mil.
Revenue was 37.439 + 34.742 + 40.422 + 43.857 = $156.5 Mil.
Gross Profit was 14.692 + 12.656 + 17.437 + 17.948 = $62.7 Mil.
Total Current Assets was $115.8 Mil.
Total Assets was $257.1 Mil.
Property, Plant and Equipment(Net PPE) was $21.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.7 Mil.
Selling, General & Admin. Expense(SGA) was $40.0 Mil.
Total Current Liabilities was $36.5 Mil.
Long-Term Debt was $1.7 Mil.
Net Income was -7.137 + -4.197 + -2.51 + -2.914 = $-16.8 Mil.
Non Operating Income was 0 + 0 + 0 + -0.544 = $-0.5 Mil.
Cash Flow from Operations was 1.081 + -1.539 + 1.562 + 2.37 = $3.5 Mil.
Accounts Receivable was $28.7 Mil.
Revenue was 44.315 + 43.159 + 30.719 + 27.987 = $146.2 Mil.
Gross Profit was 16.89 + 4.132 + 10.956 + 8.422 = $40.4 Mil.
Total Current Assets was $120.7 Mil.
Total Assets was $277.5 Mil.
Property, Plant and Equipment(Net PPE) was $20.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $40.7 Mil.
Total Current Liabilities was $49.9 Mil.
Long-Term Debt was $1.5 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)
=(27.079 / 156.46) / (28.688 / 146.18)
=0.17307299 / 0.1962512
=0.8819

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)
=(12.656 / 146.18) / (14.692 / 156.46)
=0.2763716 / 0.40095232
=0.6893

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 - (115.759 + 21.567) / 257.094) / (1 - (120.728 + 20.673) / 277.466)
=0.46585296 / 0.49038441
=0.95

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
=156.46 / 146.18
=1.0703

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))
=(16.886 / (16.886 + 20.673)) / (19.694 / (19.694 + 21.567))
=0.44958598 / 0.47730302
=0.9419

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)
=(39.962 / 156.46) / (40.663 / 146.18)
=0.25541352 / 0.27817075
=0.9182

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)
=((1.714 + 36.482) / 257.094) / ((1.479 + 49.869) / 277.466)
=0.14856823 / 0.18506051
=0.8028

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
=(-16.758 - -0.544 - 3.474) / 257.094
=-0.0766

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 -3.00 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

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.5752.38730.5281.64130.67370.72891.59651.15971.4135
GMI 0.99881.51981.02410.92881.07211.02350.93841.12911.3119
AQI 0.97353.12260.15134.41490.57310.77421.59662.42982.3506
SGI 1.02211.31011.28281.17161.08250.89430.93461.0271.2931
DEPI 1.01920.79840.84720.77610.9660.96881.12710.81860.9137
SGAI 1.14541.16060.80141.07030.8590.95650.89870.98611.0238
LVGI 0.98472.44611.54921.29791.00510.92910.91260.98661.4129
TATA -0.0324-0.4929-0.2215-0.0943-0.1095-0.0974-0.01530.0174-0.1087
M-score -3.03-2.63-4.19-0.97-3.33-3.33-1.79-1.60-1.79

Exar Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.67861.15971.70921.22661.07831.41350.68720.83350.88191.1677
GMI 0.92981.12911.24361.66811.621.31191.13820.68960.68930.7727
AQI 4.61182.42984.92412.18922.56242.35061.22361.08470.950.9282
SGI 1.08281.0270.98411.02921.13771.29311.39171.23221.07030.9218
DEPI 0.62120.81861.31631.16141.27790.91370.87671.03060.94190.9924
SGAI 0.92850.98941.12291.08251.05051.01670.89080.89280.91820.9796
LVGI 0.93420.98662.1772.1821.41721.41290.63710.57960.80280.7421
TATA 0.01450.01740.0038-0.0701-0.0983-0.1087-0.1107-0.0452-0.0766-0.0671
M-score -0.30-1.60-0.48-2.12-1.90-1.78-2.65-2.61-3.00-2.77
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