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Broadcom Beneish M-Score

: -2.67 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.67 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Broadcom's Beneish M-Score or its related term are showing as below:

AVGO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.37   Med: -2.62   Max: -1.15
Current: -2.67

During the past 13 years, the highest Beneish M-Score of Broadcom was -1.15. The lowest was -3.37. And the median was -2.62.


Broadcom Beneish M-Score Historical Data

The historical data trend for Broadcom's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Broadcom Annual Data
Trend Oct12 Oct13 Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.78 -1.91 -3.17 -3.37 -2.98

Broadcom Quarterly Data
Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.05 -2.98 -2.86 -2.65 -2.67

Competitive Comparison

For the Semiconductors subindustry, Broadcom's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Broadcom Beneish M-Score Distribution

For the Semiconductors industry and Technology sector, Broadcom's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Broadcom's Beneish M-Score falls into.



Broadcom Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Broadcom 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 * 1.0144+0.528 * 0.9162+0.404 * 0.9837+0.892 * 1.195+0.115 * 1.0355
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7978+4.679 * -0.0759-0.327 * 1.0459
=-2.67

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Jul22) TTM:Last Year (Jul21) TTM:
Total Receivables was $2,708 Mil.
Revenue was 8464 + 8103 + 7706 + 7407 = $31,680 Mil.
Gross Profit was 5681 + 5439 + 5049 + 4638 = $20,807 Mil.
Total Current Assets was $15,561 Mil.
Total Assets was $71,326 Mil.
Property, Plant and Equipment(Net PPE) was $2,250 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,269 Mil.
Selling, General, & Admin. Expense(SGA) was $1,349 Mil.
Total Current Liabilities was $6,702 Mil.
Long-Term Debt & Capital Lease Obligation was $39,191 Mil.
Net Income was 3074 + 2590 + 2472 + 1989 = $10,125 Mil.
Non Operating Income was -1 + -104 + -31 + -20 = $-156 Mil.
Cash Flow from Operations was 4424 + 4243 + 3486 + 3541 = $15,694 Mil.
Total Receivables was $2,234 Mil.
Revenue was 6778 + 6610 + 6655 + 6467 = $26,510 Mil.
Gross Profit was 4197 + 4057 + 3952 + 3747 = $15,953 Mil.
Total Current Assets was $15,636 Mil.
Total Assets was $75,880 Mil.
Property, Plant and Equipment(Net PPE) was $2,370 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,268 Mil.
Selling, General, & Admin. Expense(SGA) was $1,415 Mil.
Total Current Liabilities was $6,501 Mil.
Long-Term Debt & Capital Lease Obligation was $40,178 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(2708 / 31680) / (2234 / 26510)
=0.0854798 / 0.08427009
=1.0144

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)
=(15953 / 26510) / (20807 / 31680)
=0.60177292 / 0.65678662
=0.9162

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (15561 + 2250) / 71326) / (1 - (15636 + 2370) / 75880)
=0.75028741 / 0.76270427
=0.9837

4. SGI = Sales Growth Index

Ratio of Revenue 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
=31680 / 26510
=1.195

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(6268 / (6268 + 2370)) / (5269 / (5269 + 2250))
=0.72563093 / 0.70075808
=1.0355

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(1349 / 31680) / (1415 / 26510)
=0.04258207 / 0.05337608
=0.7978

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((39191 + 6702) / 71326) / ((40178 + 6501) / 75880)
=0.64342596 / 0.61516869
=1.0459

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
=(10125 - -156 - 15694) / 71326
=-0.0759

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Broadcom has a M-score of -2.67 suggests that the company is unlikely to be a manipulator.


Broadcom Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Broadcom's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Broadcom Business Description

Broadcom logo
Address
1320 Ridder Park Drive, San Jose, CA, USA, 95131-2313
Broadcom--the combined entity of Broadcom and Avago--boasts a highly diverse product portfolio across an array of end markets. Avago focused primarily on radio frequency filters and amplifiers used in high-end smartphones, such as the Apple iPhone and Samsung Galaxy devices, in addition to an assortment of solutions for wired infrastructure, enterprise storage, and industrial end markets. Legacy Broadcom targeted networking semiconductors, such as switch and physical layer chips, broadband products (such as television set-top box processors), and connectivity chips that handle standards such as Wi-Fi and Bluetooth. The company has acquired Brocade, CA Technologies, and Symantec's enterprise security business to bolster its offerings in software.
Executives
Fernandez Raul J director 11600 SUNRISE VALLEY DR RESTON VA 20191
Lien Justine director 1320 RIDDER PARK DRIVE SAN JOSE CA 95131
Bryant Diane M director 2200 MISSION COLLEGE BLVD SANTA CLARA CA 95054
You Harry L. director EMC CORPORATION 176 SOUTH STREET HOPKINTON MA 01748
Krause Thomas H. officer: Chief Financial Officer 1320 RIDDER PARK SAN JOSE CA 95131
Ingram Bryan officer: SVP & GM, Wireless Semicon Div C/O AVAGO TECHNOLOGIES LIMITED 350 WEST TRIMBLE ROAD, BLDG. 90 SAN JOSE CA 95131
Spears Kirsten M. officer: Principal Accounting Officer 1320 RIDDER PARK SAN JOSE CA 95131
Kawwas Charlie B officer: SVP & Chief Sales Officer C/O AVAGO TECHNOLOGIES U.S. INC. 350 WEST TRIMBLE ROAD SAN JOSE CA 95131
Brazeal Mark David officer: Chief Legal Officer 1320 RIDDER PARK DRIVE SAN JOSE CA 95131
Tan Hock E director, officer: President and CEO BROADCOM INC. 1320 RIDDER PARK DRIVE SAN JOSE CA 95131
Silver Lake Partners V De (aiv), L.p. director C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Technology Associates V, L.p. director C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Slta V (gp), L.l.c. director C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Technology Investors V, L.p. director C/O SILVER LAKE 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025
Silver Lake Group, L.l.c. director 2775 SAND HILL ROAD, SUITE 100 MENLO PARK CA 94025

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