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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 7 years, the highest Beneish M-Score of MACOM Technology Solutions Holdings Inc was -1.33. The lowest was -2.68. And the median was -2.26.
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 MACOM Technology Solutions Holdings Inc 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 * 0.825||+||0.528 * 0.9689||+||0.404 * 1.0276||+||0.892 * 1.2427||+||0.115 * 0.8116|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0869||+||4.679 * -0.0246||-||0.327 * 0.9185|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $91.6 Mil.|
Revenue was 133.579 + 115.774 + 50.197 + 130.663 = $430.2 Mil.
Gross Profit was 65.525 + 60.318 + 35.598 + 59.784 = $221.2 Mil.
Total Current Assets was $308.0 Mil.
Total Assets was $900.4 Mil.
Property, Plant and Equipment(Net PPE) was $99.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $62.0 Mil.
Selling, General & Admin. Expense(SGA) was $124.5 Mil.
Total Current Liabilities was $82.8 Mil.
Long-Term Debt was $341.4 Mil.
Net Income was -10.649 + -15.571 + 54.406 + 8.027 = $36.2 Mil.
Non Operating Income was -4.282 + -14.778 + 5.781 + 4.321 = $-9.0 Mil.
Cash Flow from Operations was 19.584 + 15.514 + 5.483 + 26.763 = $67.3 Mil.
|Accounts Receivable was $89.4 Mil.
Revenue was 102.431 + 96.556 + 34.844 + 112.364 = $346.2 Mil.
Gross Profit was 46.714 + 47.419 + 28.141 + 50.214 = $172.5 Mil.
Total Current Assets was $308.7 Mil.
Total Assets was $800.2 Mil.
Property, Plant and Equipment(Net PPE) was $65.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.5 Mil.
Selling, General & Admin. Expense(SGA) was $92.2 Mil.
Total Current Liabilities was $68.2 Mil.
Long-Term Debt was $342.3 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)|
|=||(91.604 / 430.213)||/||(89.35 / 346.195)|
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)|
|=||(172.488 / 346.195)||/||(221.225 / 430.213)|
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 - (308.025 + 99.637) / 900.398)||/||(1 - (308.74 + 65.352) / 800.249)|
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))|
|=||(29.523 / (29.523 + 65.352))||/||(61.961 / (61.961 + 99.637))|
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)|
|=||(124.507 / 430.213)||/||(92.181 / 346.195)|
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)|
|=||((341.396 + 82.834) / 900.398)||/||((342.335 + 68.173) / 800.249)|
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|
|=||(36.213 - -8.958||-||67.344)||/||900.398|
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.
MACOM Technology Solutions Holdings Inc has a M-score of -2.55 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
MACOM Technology Solutions Holdings Inc Annual Data
MACOM Technology Solutions Holdings Inc Quarterly Data