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GuruFocus has detected 7 Warning Signs with Marvell Technology Group Ltd $MRVL.
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Marvell Technology Group Ltd (NAS:MRVL)
Beneish M-Score
-1.98 (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 -1.98 signals that the company is a manipulator.

MRVL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.88   Max: -1.87
Current: -1.98

-3.88
-1.87

During the past 13 years, the highest Beneish M-Score of Marvell Technology Group Ltd was -1.87. The lowest was -3.88. 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 * 1.1816+0.528 * 0.8211+0.404 * 1.1186+0.892 * 0.8779+0.115 * 0.8358
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2413+4.679 * 0.0814-0.327 * 0.4741
=-1.98

* 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 571.4 + 654.422 + 626.404 + 540.822 = $2,393 Mil.
Gross Profit was 327.517 + 368.359 + 338.796 + 281.612 = $1,316 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 $300 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 0 + 0 + 3.188 + -1.836 = $1 Mil.
Cash Flow from Operations was 118.846 + 121.461 + 10.859 + -609.601 = $-358 Mil.
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 $275 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 / 2393.048) / (323.3 / 2725.828)
=0.1401493 / 0.11860616
=1.1816

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)
=(1231.092 / 2725.828) / (1316.284 / 2393.048)
=0.45163965 / 0.55004496
=0.8211

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 - (2918.626 + 299.54) / 5442.127)
=0.4571054 / 0.40865658
=1.1186

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
=2393.048 / 2725.828
=0.8779

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 + 299.54)) / (118.492 / (118.492 + 243.397))
=0.27367339 / 0.32742637
=0.8358

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)
=(299.572 / 2393.048) / (274.908 / 2725.828)
=0.12518428 / 0.10085303
=1.2413

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 - 1.352 - -358.435) / 4648.65
=0.0814

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 -1.98 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 0.78180.65631.68821.00090.94370.86831.27810.85251.04451.2201
GMI 1.05330.93430.91750.95081.04241.07441.0341.01721.11290.8126
AQI 0.95570.96520.8190.78281.11721.09550.94520.90341.09321.1186
SGI 1.29371.01930.95161.28640.93940.93391.07441.08890.73530.8503
DEPI 0.77220.95261.07621.15761.23080.94980.95321.08970.97850.8358
SGAI 0.93180.75751.20880.65111.06341.11310.8860.95931.39091.2823
LVGI 0.86670.43431.14430.94621.01121.13021.08020.86792.07950.4741
TATA -0.0641-0.1208-0.0886-0.0457-0.0271-0.081-0.0277-0.0521-0.18730.0817
M-score -2.68-3.17-2.50-2.46-2.63-3.03-2.30-2.75-3.88-1.98

Marvell Technology Group Ltd Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.81910.85250.79550.98361.09081.04450.97371.09421.15731.1816
GMI 1.04841.01720.97541.03541.08491.11291.13840.95380.85670.8211
AQI 0.89310.90340.94851.00891.03441.09321.27341.22141.19351.1186
SGI 1.16421.08890.95740.85190.78470.73530.73190.76290.82160.8779
DEPI 1.04331.08971.09061.07011.01620.97850.9770.91090.90620.8358
SGAI 0.82980.96081.11251.25911.33851.38881.29121.23921.1441.2413
LVGI 0.85210.86790.75931.78981.982.07950.98630.44260.44330.4741
TATA -0.0434-0.0522-0.0372-0.1749-0.1901-0.1881-0.08340.09540.11060.0814
M-score -2.64-2.75-2.84-3.72-3.80-3.88-3.00-1.96-1.83-1.98
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