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GuruFocus has detected 6 Warning Signs with Marvell Technology Group Ltd $MRVL.
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Marvell Technology Group Ltd (NAS:MRVL)
Beneish M-Score
-1.94 (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.

Marvell Technology Group Ltd has a M-score of -1.94 signals that the company is a manipulator.

MRVL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.89   Max: -1.87
Current: -1.94

-3.89
-1.87

During the past 13 years, the highest Beneish M-Score of Marvell Technology Group Ltd was -1.87. The lowest was -3.89. And the median was -2.50.


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 Marvell Technology Group Ltd 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 * 1.1858+0.528 * 0.8195+0.404 * 1.1355+0.892 * 0.8749+0.115 * 0.8415
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0316+4.679 * 0.0805-0.327 * 0.4741
=-1.94

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $335 Mil.
Revenue was 496.026 + 654.422 + 626.404 + 540.822 = $2,318 Mil.
Gross Profit was 299.38 + 368.359 + 338.796 + 281.612 = $1,288 Mil.
Total Current Assets was $2,280 Mil.
Total Assets was $4,649 Mil.
Property, Plant and Equipment(Net PPE) was $243 Mil.
Depreciation, Depletion and Amortization(DDA) was $118 Mil.
Selling, General & Admin. Expense(SGA) was $243 Mil.
Total Current Liabilities was $496 Mil.
Long-Term Debt was $0 Mil.
Net Income was -80.091 + 72.616 + 51.305 + -22.679 = $21 Mil.
Non Operating Income was 4.192 + 0 + 3.188 + -1.836 = $6 Mil.
Cash Flow from Operations was 118.846 + 121.461 + 10.859 + -609.601 = $-358 Mil.
Accounts Receivable was $323 Mil.
Revenue was 539.546 + 674.89 + 710.492 + 724.288 = $2,649 Mil.
Gross Profit was 289.155 + 295.636 + 248.773 + 373.135 = $1,207 Mil.
Total Current Assets was $2,955 Mil.
Total Assets was $5,442 Mil.
Property, Plant and Equipment(Net PPE) was $297 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $269 Mil.
Total Current Liabilities was $1,226 Mil.
Long-Term Debt was $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)
=(335.384 / 2317.674) / (323.3 / 2649.216)
=0.14470715 / 0.1220361
=1.1858

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)
=(1206.699 / 2649.216) / (1288.147 / 2317.674)
=0.45549287 / 0.55579301
=0.8195

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 - (2280.33 + 243.397) / 4648.65) / (1 - (2954.662 + 296.778) / 5442.127)
=0.4571054 / 0.40254243
=1.1355

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
=2317.674 / 2649.216
=0.8749

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))
=(112.864 / (112.864 + 296.778)) / (118.492 / (118.492 + 243.397))
=0.27551862 / 0.32742637
=0.8415

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)
=(243.193 / 2317.674) / (269.455 / 2649.216)
=0.10492977 / 0.10171122
=1.0316

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 + 496.416) / 4648.65) / ((0 + 1225.785) / 5442.127)
=0.10678713 / 0.22524006
=0.4741

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
=(21.151 - 5.544 - -358.435) / 4648.65
=0.0805

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.

Marvell Technology Group Ltd has a M-score of -1.94 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 local exchange's currency.

Marvell Technology Group Ltd Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.78180.65631.68821.00090.94370.86831.27810.86881.05441.1858
GMI 1.05330.93430.91750.95081.04241.07441.0341.01191.10930.8195
AQI 0.95570.96520.8190.78281.11721.09550.94520.90341.07681.1355
SGI 1.29371.01930.95161.28640.93940.93391.07441.06840.72840.8749
DEPI 0.77220.95261.07621.15761.23080.94980.95321.08970.9720.8415
SGAI 0.93180.75751.20880.65111.06341.11310.8860.95911.4031.0316
LVGI 0.86670.43431.14430.94621.01121.13021.08020.86792.07950.4741
TATA -0.0641-0.1208-0.0886-0.0457-0.0271-0.081-0.0277-0.0521-0.18730.0808
M-score -2.68-3.17-2.50-2.46-2.63-3.03-2.30-2.76-3.89-1.93

Marvell Technology Group Ltd Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.81910.86880.81181.00541.1171.05440.98371.10491.16671.1858
GMI 1.04841.01190.96981.03011.07971.10931.13480.94770.84970.8195
AQI 0.89310.90340.94851.00891.03441.07681.27341.22141.19351.1355
SGI 1.16421.06840.93820.83350.76620.72840.72440.75550.81490.8749
DEPI 1.04331.08971.09061.07011.01620.9720.9770.91090.90620.8415
SGAI 0.82980.96061.11431.26331.34521.40091.30151.24841.15041.0316
LVGI 0.85210.86790.75931.78981.982.07950.98630.44260.44330.4741
TATA -0.0434-0.0522-0.0372-0.1749-0.1901-0.1881-0.08340.09540.11060.0805
M-score -2.64-2.76-2.85-3.72-3.79-3.89-3.00-1.96-1.83-1.94
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