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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 13 years, the highest Beneish M-Score of Marvell Technology Group Ltd was -1.87. The lowest was -3.86. And the median was -2.64.
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 * 0.9737||+||0.528 * 1.1384||+||0.404 * 1.2734||+||0.892 * 0.7319||+||0.115 * 0.977|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2845||+||4.679 * -0.0825||-||0.327 * 0.9863|
|This Year (Apr16) TTM:||Last Year (Apr15) TTM:|
|Accounts Receivable was $281 Mil.|
Revenue was 540.822 + 616.158 + 674.89 + 710.492 = $2,542 Mil.
Gross Profit was 281.612 + 313.548 + 295.636 + 248.773 = $1,140 Mil.
Total Current Assets was $2,150 Mil.
Total Assets was $4,657 Mil.
Property, Plant and Equipment(Net PPE) was $284 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $262 Mil.
Total Current Liabilities was $485 Mil.
Long-Term Debt was $0 Mil.
Net Income was -22.679 + 4.2 + -57.75 + -771.94 = $-848 Mil.
Non Operating Income was -1.836 + -2.779 + 0.867 + 3.011 = $-1 Mil.
Cash Flow from Operations was -609.601 + 53.306 + 66.594 + 26.584 = $-463 Mil.
|Accounts Receivable was $394 Mil.
Revenue was 724.288 + 857.452 + 930.136 + 961.545 = $3,473 Mil.
Gross Profit was 373.135 + 440.321 + 475.162 + 483.804 = $1,772 Mil.
Total Current Assets was $3,326 Mil.
Total Assets was $5,842 Mil.
Property, Plant and Equipment(Net PPE) was $326 Mil.
Depreciation, Depletion and Amortization(DDA) was $120 Mil.
Selling, General & Admin. Expense(SGA) was $278 Mil.
Total Current Liabilities was $616 Mil.
Long-Term Debt was $0 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)|
|=||(280.658 / 2542.362)||/||(393.814 / 3473.421)|
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)|
|=||(1772.422 / 3473.421)||/||(1139.569 / 2542.362)|
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 - (2149.776 + 283.584) / 4657.121)||/||(1 - (3325.739 + 325.754) / 5842.049)|
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))|
|=||(120.078 / (120.078 + 325.754))||/||(107.925 / (107.925 + 283.584))|
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)|
|=||(261.673 / 2542.362)||/||(278.315 / 3473.421)|
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 + 484.699) / 4657.121)||/||((0 + 616.488) / 5842.049)|
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|
|=||(-848.169 - -0.737||-||-463.117)||/||4657.121|
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 -2.99 suggests that the company will not 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
Marvell Technology Group Ltd Annual Data
Marvell Technology Group Ltd Quarterly Data