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Broadcom Beneish M-Score

: -3.02 (As of Today)
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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.

Broadcom has a M-score of -3.02 suggests that the company is not a manipulator.

NAS:AVGO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.3   Max: -1.15
Current: -3.02

-3.3
-1.15

During the past 12 years, the highest Beneish M-Score of Broadcom was -1.15. The lowest was -3.30. And the median was -2.54.


Broadcom Beneish M-Score Historical Data

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

* Premium members only.

Broadcom Annual Data
Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Oct17 Oct18
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.10 -2.48 -1.50 -2.83 -1.85

Broadcom Quarterly Data
Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19
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 -2.00 -1.85 -2.46 -2.88 -3.02

Competitive Comparison
* 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.


Broadcom Beneish M-Score Distribution

* 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 * 1.0692+0.528 * 0.9127+0.404 * 1.042+0.892 * 1.0996+0.115 * 0.9188
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3964+4.679 * -0.0875-0.327 * 1.5527
=-3.02

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

This Year (Jul19) TTM:Last Year (Jul18) TTM:
Accounts Receivable was $3,539 Mil.
Revenue was 5515 + 5517 + 5789 + 5444 = $22,265 Mil.
Gross Profit was 3034 + 3089 + 3208 + 2935 = $12,266 Mil.
Total Current Assets was $10,898 Mil.
Total Assets was $69,767 Mil.
Property, Plant and Equipment(Net PPE) was $2,611 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,324 Mil.
Selling, General, & Admin. Expense(SGA) was $1,537 Mil.
Total Current Liabilities was $8,282 Mil.
Long-Term Debt & Capital Lease Obligation was $34,028 Mil.
Net Income was 715 + 691 + 471 + 1115 = $2,992 Mil.
Non Operating Income was -8 + -13 + -505 + -227 = $-753 Mil.
Cash Flow from Operations was 2419 + 2667 + 2132 + 2635 = $9,853 Mil.
Accounts Receivable was $3,010 Mil.
Revenue was 5063 + 5014 + 5327 + 4844 = $20,248 Mil.
Gross Profit was 2619 + 2551 + 2628 + 2383 = $10,181 Mil.
Total Current Assets was $8,695 Mil.
Total Assets was $50,372 Mil.
Property, Plant and Equipment(Net PPE) was $2,695 Mil.
(DDA) was $4,332 Mil.
Selling, General, & Admin. Expense(SGA) was $1,001 Mil.
Total Current Liabilities was $2,187 Mil.
Long-Term Debt & Capital Lease Obligation was $17,487 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(3539 / 22265) / (3010 / 20248)
=0.15894902 / 0.14865666
=1.0692

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)
=(10181 / 20248) / (12266 / 22265)
=0.50281509 / 0.5509095
=0.9127

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 - (10898 + 2611) / 69767) / (1 - (8695 + 2695) / 50372)
=0.80636977 / 0.77388232
=1.042

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
=22265 / 20248
=1.0996

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))
=(4332 / (4332 + 2695)) / (5324 / (5324 + 2611))
=0.61647929 / 0.67095148
=0.9188

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(1537 / 22265) / (1001 / 20248)
=0.06903211 / 0.04943698
=1.3964

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)
=((34028 + 8282) / 69767) / ((17487 + 2187) / 50372)
=0.60644717 / 0.39057413
=1.5527

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
=(2992 - -753 - 9853) / 69767
=-0.0875

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.

Broadcom has a M-score of -3.02 suggests that the company will not be a manipulator.


Broadcom Beneish M-Score Headlines

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