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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.
Maxim Integrated Products Inc has a M-score of -2.64 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Maxim Integrated Products Inc was -1.62. The lowest was -4.05. And the median was -2.92.
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 Maxim Integrated Products 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 * 1.0215||+||0.528 * 1.0709||+||0.404 * 1.6134||+||0.892 * 0.9923||+||0.115 * 0.9101|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0124||+||4.679 * -0.0846||-||0.327 * 1.1447|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $304 Mil.|
Revenue was 605.681 + 620.274 + 585.241 + 608.194 = $2,419 Mil.
Gross Profit was 339.937 + 328.672 + 347.196 + 371.399 = $1,387 Mil.
Total Current Assets was $1,979 Mil.
Total Assets was $4,355 Mil.
Property, Plant and Equipment(Net PPE) was $1,355 Mil.
Depreciation, Depletion and Amortization(DDA) was $231 Mil.
Selling, General & Admin. Expense(SGA) was $324 Mil.
Total Current Liabilities was $391 Mil.
Long-Term Debt was $1,001 Mil.
Net Income was 122.544 + 44.353 + 103.12 + 119.014 = $389 Mil.
Non Operating Income was 0 + 0 + 0.837 + 0 = $1 Mil.
Cash Flow from Operations was 211.698 + 234.431 + 95.894 + 214.4 = $756 Mil.
|Accounts Receivable was $300 Mil.
Revenue was 604.884 + 605.306 + 623.075 + 604.956 = $2,438 Mil.
Gross Profit was 376.102 + 363.375 + 385.691 + 371.989 = $1,497 Mil.
Total Current Assets was $2,336 Mil.
Total Assets was $4,334 Mil.
Property, Plant and Equipment(Net PPE) was $1,369 Mil.
Depreciation, Depletion and Amortization(DDA) was $209 Mil.
Selling, General & Admin. Expense(SGA) was $322 Mil.
Total Current Liabilities was $707 Mil.
Long-Term Debt was $504 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)|
|=||(304.128 / 2419.39)||/||(300.046 / 2438.221)|
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)|
|=||(328.672 / 2438.221)||/||(339.937 / 2419.39)|
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 - (1979.278 + 1355.268) / 4354.565)||/||(1 - (2335.958 + 1368.905) / 4334.118)|
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))|
|=||(209.499 / (209.499 + 1368.905))||/||(231.393 / (231.393 + 1355.268))|
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)|
|=||(323.664 / 2419.39)||/||(322.179 / 2438.221)|
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)|
|=||((1000.871 + 391.388) / 4354.565)||/||((503.573 + 706.963) / 4334.118)|
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|
|=||(389.031 - 0.837||-||756.423)||/||4354.565|
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.
Maxim Integrated Products Inc has a M-score of -2.64 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
Maxim Integrated Products Inc Annual Data
Maxim Integrated Products Inc Quarterly Data