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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 -1.83. The lowest was -4.13. And the median was -2.61.
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 * 0.8191||+||0.528 * 1.0484||+||0.404 * 0.8931||+||0.892 * 1.1642||+||0.115 * 1.0433|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8402||+||4.679 * -0.0446||-||0.327 * 0.8521|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $445 Mil.|
Revenue was 930.136 + 961.545 + 957.83 + 931.749 = $3,781 Mil.
Gross Profit was 475.162 + 483.804 + 463.97 + 454.497 = $1,877 Mil.
Total Current Assets was $3,286 Mil.
Total Assets was $5,849 Mil.
Property, Plant and Equipment(Net PPE) was $343 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $265 Mil.
Total Current Liabilities was $705 Mil.
Long-Term Debt was $0 Mil.
Net Income was 115.304 + 138.87 + 99.479 + 97.129 = $451 Mil.
Non Operating Income was 0 + 24.526 + 0 + 0 = $25 Mil.
Cash Flow from Operations was 194.644 + 156.954 + 235.137 + 100.489 = $687 Mil.
|Accounts Receivable was $467 Mil.
Revenue was 931.226 + 807.056 + 734.369 + 775.294 = $3,248 Mil.
Gross Profit was 466.245 + 420.997 + 398.931 + 404.461 = $1,691 Mil.
Total Current Assets was $2,718 Mil.
Total Assets was $5,348 Mil.
Property, Plant and Equipment(Net PPE) was $358 Mil.
Depreciation, Depletion and Amortization(DDA) was $147 Mil.
Selling, General & Admin. Expense(SGA) was $271 Mil.
Total Current Liabilities was $757 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)|
|=||(445.05 / 3781.26)||/||(466.729 / 3247.945)|
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)|
|=||(483.804 / 3247.945)||/||(475.162 / 3781.26)|
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 - (3286.362 + 343.101) / 5848.807)||/||(1 - (2717.659 + 358.15) / 5347.956)|
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))|
|=||(147.04 / (147.04 + 358.15))||/||(132.749 / (132.749 + 343.101))|
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)|
|=||(265.128 / 3781.26)||/||(271.033 / 3247.945)|
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 + 705.408) / 5848.807)||/||((0 + 756.972) / 5347.956)|
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|
|=||(450.782 - 24.526||-||687.224)||/||5848.807|
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 -2.65 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