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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 -2.57.
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 * 1.0445||+||0.528 * 1.1129||+||0.404 * 1.0932||+||0.892 * 0.7353||+||0.115 * 0.9785|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3952||+||4.679 * -0.1875||-||0.327 * 2.0271|
|This Year (Jan16) TTM:||Last Year (Jan15) TTM:|
|Accounts Receivable was $323 Mil.|
Revenue was 616.158 + 674.89 + 710.492 + 724.288 = $2,726 Mil.
Gross Profit was 313.548 + 295.636 + 248.773 + 373.135 = $1,231 Mil.
Total Current Assets was $2,919 Mil.
Total Assets was $5,442 Mil.
Property, Plant and Equipment(Net PPE) was $300 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $276 Mil.
Total Current Liabilities was $1,226 Mil.
Long-Term Debt was $0 Mil.
Net Income was 4.2 + -57.75 + -771.94 + 14.09 = $-811 Mil.
Non Operating Income was 0 + 0.867 + 3.011 + 0 = $4 Mil.
Cash Flow from Operations was 53.306 + 66.594 + 26.584 + 58.868 = $205 Mil.
|Accounts Receivable was $421 Mil.
Revenue was 857.452 + 930.136 + 961.545 + 957.83 = $3,707 Mil.
Gross Profit was 440.321 + 475.162 + 483.804 + 463.97 = $1,863 Mil.
Total Current Assets was $3,344 Mil.
Total Assets was $5,884 Mil.
Property, Plant and Equipment(Net PPE) was $341 Mil.
Depreciation, Depletion and Amortization(DDA) was $125 Mil.
Selling, General & Admin. Expense(SGA) was $269 Mil.
Total Current Liabilities was $637 Mil.
Long-Term Debt was $16 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)|
|=||(323.3 / 2725.828)||/||(420.955 / 3706.963)|
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)|
|=||(1863.257 / 3706.963)||/||(1231.092 / 2725.828)|
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 - (2918.626 + 299.54) / 5442.127)||/||(1 - (3344.04 + 340.639) / 5884.387)|
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))|
|=||(124.585 / (124.585 + 340.639))||/||(112.864 / (112.864 + 299.54))|
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)|
|=||(276.186 / 2725.828)||/||(269.199 / 3706.963)|
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 + 1225.785) / 5442.127)||/||((16.468 + 637.376) / 5884.387)|
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|
|=||(-811.4 - 3.878||-||205.352)||/||5442.127|
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 -3.86 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