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GuruFocus has detected 8 Warning Signs with Maxim Integrated Products Inc $MXIM.
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Maxim Integrated Products Inc (NAS:MXIM)
Beneish M-Score
-2.95 (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.

Maxim Integrated Products Inc has a M-score of -2.95 suggests that the company is not a manipulator.

MXIM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.79   Max: -1.15
Current: -2.95

-3.79
-1.15

During the past 13 years, the highest Beneish M-Score of Maxim Integrated Products Inc was -1.15. The lowest was -3.79. And the median was -2.87.


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 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 * 0.905+0.528 * 0.8769+0.404 * 0.856+0.892 * 1.022+0.115 * 1.3126
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9715+4.679 * -0.0725-0.327 * 0.9496
=-2.95

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $258 Mil.
Revenue was 581.216 + 550.998 + 561.396 + 566.126 = $2,260 Mil.
Gross Profit was 366.904 + 340.178 + 345.732 + 347.027 = $1,400 Mil.
Total Current Assets was $2,715 Mil.
Total Assets was $4,018 Mil.
Property, Plant and Equipment(Net PPE) was $637 Mil.
Depreciation, Depletion and Amortization(DDA) was $173 Mil.
Selling, General & Admin. Expense(SGA) was $288 Mil.
Total Current Liabilities was $294 Mil.
Long-Term Debt was $992 Mil.
Net Income was 140.213 + 130.477 + 137.614 + 92.339 = $501 Mil.
Non Operating Income was 0 + 0 + 0 + 0.962 = $1 Mil.
Cash Flow from Operations was 220.697 + 192.63 + 123.402 + 254.071 = $791 Mil.
Accounts Receivable was $279 Mil.
Revenue was 555.252 + 510.831 + 562.51 + 582.517 = $2,211 Mil.
Gross Profit was 318.841 + 292.169 + 286.351 + 303.701 = $1,201 Mil.
Total Current Assets was $2,462 Mil.
Total Assets was $3,981 Mil.
Property, Plant and Equipment(Net PPE) was $749 Mil.
Depreciation, Depletion and Amortization(DDA) was $291 Mil.
Selling, General & Admin. Expense(SGA) was $290 Mil.
Total Current Liabilities was $342 Mil.
Long-Term Debt was $1,000 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)
=(257.592 / 2259.736) / (278.502 / 2211.11)
=0.11399208 / 0.12595574
=0.905

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)
=(1201.062 / 2211.11) / (1399.841 / 2259.736)
=0.54319414 / 0.61947104
=0.8769

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 - (2715.107 + 636.835) / 4017.783) / (1 - (2461.91 + 748.781) / 3981.468)
=0.16572348 / 0.19359116
=0.856

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
=2259.736 / 2211.11
=1.022

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))
=(290.862 / (290.862 + 748.781)) / (172.512 / (172.512 + 636.835))
=0.27977104 / 0.21314961
=1.3126

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)
=(287.865 / 2259.736) / (289.948 / 2211.11)
=0.12738877 / 0.13113233
=0.9715

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)
=((991.877 + 294.11) / 4017.783) / ((1000 + 342.033) / 3981.468)
=0.32007378 / 0.33706989
=0.9496

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
=(500.643 - 0.962 - 790.8) / 4017.783
=-0.0725

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 -2.95 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.

Maxim Integrated Products Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.76171.08670.95271.34550.70871.09720.88521.03121.00260.967
GMI 1.08371.00361.16980.86350.96511.02520.98481.08611.02360.9724
AQI 1.36721.63710.89093.05391.07411.31650.86361.41620.85290.908
SGI 1.0821.02170.80181.21361.23770.97221.01581.0050.94020.9514
DEPI 1.05650.69310.7521.16420.8291.0041.02930.84460.72060.8251
SGAI 1.05721.12291.05871.00190.9761.12980.99370.99641.0090.9857
LVGI 0.83850.89620.77162.74120.8471.00541.13381.37641.02351.1617
TATA -0.0916-0.0544-0.1413-0.105-0.1056-0.099-0.0914-0.0987-0.1253-0.117
M-score -2.81-2.40-3.28-2.26-2.98-2.76-3.10-2.84-3.21-3.22

Maxim Integrated Products Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.90540.93581.00261.07180.95921.07070.9670.93660.97010.905
GMI 1.03511.01491.02361.05521.06021.040.97240.89630.88610.8769
AQI 0.85610.85170.85290.96441.0280.97040.9080.7440.7890.856
SGI 0.99030.97830.94020.93480.93230.93420.95140.95831.00031.022
DEPI 0.75420.76740.72060.55760.62390.67930.82511.37261.36111.3126
SGAI 1.00561.00651.0090.98070.97430.97390.98571.00070.97150.9715
LVGI 1.00811.01711.02351.09931.03261.03651.16171.06440.94930.9496
TATA -0.1246-0.1265-0.1253-0.1776-0.1449-0.1246-0.117-0.0696-0.0605-0.0725
M-score -3.23-3.24-3.21-3.37-3.26-3.09-3.22-3.04-2.87-2.95
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