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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 -3.17. And the median was -2.50.
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 * 0.8525||+||0.528 * 1.0172||+||0.404 * 0.9034||+||0.892 * 1.0889||+||0.115 * 1.0897|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9709||+||4.679 * -0.0546||-||0.327 * 0.8904|
|This Year (Jan15) TTM:||Last Year (Jan14) TTM:|
|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 $274 Mil.
Total Current Liabilities was $637 Mil.
Long-Term Debt was $16 Mil.
Net Income was 81.693 + 115.304 + 138.87 + 99.479 = $435 Mil.
Non Operating Income was 3.32 + 0 + 24.526 + 0 = $28 Mil.
Cash Flow from Operations was 142.201 + 194.644 + 156.954 + 235.137 = $729 Mil.
|Accounts Receivable was $453 Mil.
Revenue was 931.749 + 931.226 + 807.056 + 734.369 = $3,404 Mil.
Gross Profit was 454.497 + 466.245 + 420.997 + 398.931 = $1,741 Mil.
Total Current Assets was $2,839 Mil.
Total Assets was $5,451 Mil.
Property, Plant and Equipment(Net PPE) was $356 Mil.
Depreciation, Depletion and Amortization(DDA) was $147 Mil.
Selling, General & Admin. Expense(SGA) was $259 Mil.
Total Current Liabilities was $651 Mil.
Long-Term Debt was $29 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)|
|=||(420.955 / 3706.963)||/||(453.496 / 3404.4)|
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)|
|=||(475.162 / 3404.4)||/||(440.321 / 3706.963)|
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 - (3344.04 + 340.639) / 5884.387)||/||(1 - (2839.22 + 356.165) / 5451.01)|
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))|
|=||(146.758 / (146.758 + 356.165))||/||(124.585 / (124.585 + 340.639))|
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)|
|=||(273.982 / 3706.963)||/||(259.169 / 3404.4)|
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)|
|=||((16.468 + 637.376) / 5884.387)||/||((28.959 + 651.306) / 5451.01)|
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|
|=||(435.346 - 27.846||-||728.936)||/||5884.387|
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 -2.77 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