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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.
During the past 10 years, the highest Beneish M-Score of GigPeak Inc was -1.83. The lowest was -3.50. And the median was -2.82.
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 GigPeak 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 * 1.3659||+||0.528 * 0.92||+||0.404 * 1.9747||+||0.892 * 1.324||+||0.115 * 1.0858|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9895||+||4.679 * -0.0172||-||0.327 * 1.7858|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $14.18 Mil.|
Revenue was 15.368 + 11.362 + 11.075 + 10.419 = $48.22 Mil.
Gross Profit was 10.175 + 7.679 + 7.217 + 6.657 = $31.73 Mil.
Total Current Assets was $70.08 Mil.
Total Assets was $149.92 Mil.
Property, Plant and Equipment(Net PPE) was $3.63 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.66 Mil.
Selling, General & Admin. Expense(SGA) was $14.08 Mil.
Total Current Liabilities was $17.74 Mil.
Long-Term Debt was $18.34 Mil.
Net Income was 0.085 + -0.052 + 0.333 + 1.03 = $1.40 Mil.
Non Operating Income was -0.081 + -0.004 + -0.053 + -0.005 = $-0.14 Mil.
Cash Flow from Operations was -0.828 + 3.493 + 0.728 + 0.73 = $4.12 Mil.
|Accounts Receivable was $7.84 Mil.
Revenue was 9.84 + 9.06 + 9.04 + 8.484 = $36.42 Mil.
Gross Profit was 6.229 + 5.393 + 5.424 + 5.002 = $22.05 Mil.
Total Current Assets was $33.84 Mil.
Total Assets was $48.68 Mil.
Property, Plant and Equipment(Net PPE) was $2.31 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.62 Mil.
Selling, General & Admin. Expense(SGA) was $10.75 Mil.
Total Current Liabilities was $6.56 Mil.
Long-Term Debt was $0.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(14.183 / 48.224)||/||(7.843 / 36.424)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(22.048 / 36.424)||/||(31.728 / 48.224)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (70.08 + 3.628) / 149.915)||/||(1 - (33.838 + 2.309) / 48.678)|
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.
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))|
|=||(3.618 / (3.618 + 2.309))||/||(4.659 / (4.659 + 3.628))|
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)|
|=||(14.083 / 48.224)||/||(10.75 / 36.424)|
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)|
|=||((18.343 + 17.736) / 149.915)||/||((0 + 6.56) / 48.678)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1.396 - -0.143||-||4.123)||/||149.915|
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.
GigPeak Inc has a M-score of -1.83 signals that the company is likely to be a manipulator.
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
GigPeak Inc Annual Data
GigPeak Inc Quarterly Data