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GuruFocus has detected 6 Warning Signs with Marvell Technology Group Ltd $MRVL.
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Marvell Technology Group Ltd (NAS:MRVL)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

MRVL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.89   Max: -1.83
Current: -2.68

-3.89
-1.83

During the past 13 years, the highest Beneish M-Score of Marvell Technology Group Ltd was -1.83. The lowest was -3.89. And the median was -2.63.


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 * 1.3202+0.528 * 0.7885+0.404 * 0.9612+0.892 * 0.9639+0.115 * 0.905
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9487+4.679 * -0.0629-0.327 * 1.1197
=-2.68

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $357 Mil.
Revenue was 579.18 + 496.026 + 654.422 + 626.404 = $2,356 Mil.
Gross Profit was 348.631 + 299.38 + 368.359 + 338.796 = $1,355 Mil.
Total Current Assets was $2,269 Mil.
Total Assets was $4,636 Mil.
Property, Plant and Equipment(Net PPE) was $239 Mil.
Depreciation, Depletion and Amortization(DDA) was $110 Mil.
Selling, General & Admin. Expense(SGA) was $235 Mil.
Total Current Liabilities was $540 Mil.
Long-Term Debt was $0 Mil.
Net Income was 106.621 + -80.091 + 72.616 + 51.305 = $150 Mil.
Non Operating Income was -0.128 + 4.192 + 0 + 3.188 = $7 Mil.
Cash Flow from Operations was 135.146 + 118.846 + 121.461 + 59.282 = $435 Mil.
Accounts Receivable was $281 Mil.
Revenue was 519.383 + 539.546 + 674.89 + 710.492 = $2,444 Mil.
Gross Profit was 275.029 + 289.155 + 295.636 + 248.773 = $1,109 Mil.
Total Current Assets was $2,150 Mil.
Total Assets was $4,657 Mil.
Property, Plant and Equipment(Net PPE) was $284 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $257 Mil.
Total Current Liabilities was $485 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)
=(357.147 / 2356.032) / (280.658 / 2444.311)
=0.15158835 / 0.1148209
=1.3202

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)
=(1108.593 / 2444.311) / (1355.166 / 2356.032)
=0.45354008 / 0.57518998
=0.7885

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 - (2268.988 + 239.358) / 4636.237) / (1 - (2149.776 + 283.584) / 4657.121)
=0.45896942 / 0.47749693
=0.9612

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
=2356.032 / 2444.311
=0.9639

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))
=(113.251 / (113.251 + 283.584)) / (110.245 / (110.245 + 239.358))
=0.28538561 / 0.3153434
=0.905

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)
=(235.03 / 2356.032) / (257.009 / 2444.311)
=0.09975671 / 0.10514579
=0.9487

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 + 540.26) / 4636.237) / ((0 + 484.699) / 4657.121)
=0.11652985 / 0.10407696
=1.1197

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
=(150.451 - 7.252 - 434.735) / 4636.237
=-0.0629

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 -2.68 suggests that the company will not 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 0.78180.65631.68821.00090.94370.86831.27810.86881.05441.1968
GMI 1.05330.93430.91750.95081.04241.07441.0341.01191.10930.8161
AQI 0.95570.96520.8190.78281.11721.09550.94520.90341.07681.1355
SGI 1.29371.01930.95161.28640.93940.93391.07441.06840.72840.8668
DEPI 0.77220.95261.07621.15761.23080.94980.95321.08970.9720.8415
SGAI 0.93180.75751.20880.65111.06341.11310.8860.96061.40091.0447
LVGI 0.86670.43431.14430.94621.01121.13021.08020.86792.07950.4741
TATA -0.0641-0.1208-0.0886-0.0451-0.0271-0.081-0.0307-0.0522-0.18810.0805
M-score -2.68-3.17-2.50-2.45-2.63-3.03-2.32-2.76-3.89-1.94

Marvell Technology Group Ltd Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 0.86880.81181.00541.1171.05440.99241.1151.17741.19681.3202
GMI 1.01190.96981.03011.07971.10931.13170.94430.84630.81610.7885
AQI 0.90340.94851.00891.03441.07681.27341.22141.19351.13550.9612
SGI 1.06840.93820.83350.76620.72840.71810.74870.80750.86680.9639
DEPI 1.08971.09061.07011.01620.9720.94380.91090.90620.84150.905
SGAI 0.96061.11431.26331.34521.40091.31691.26361.16461.04470.9487
LVGI 0.86790.75931.78981.982.07950.98630.44260.44330.47411.1197
TATA -0.0522-0.0372-0.1749-0.1901-0.1881-0.07310.09540.11060.0805-0.0629
M-score -2.76-2.85-3.72-3.79-3.89-2.96-1.97-1.83-1.94-2.68
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