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Cadence Design Systems Beneish M-Score

: -2.47 (As of Today)
View and export this data going back to 1990. Start your Free Trial

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 -2.47 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

NAS:CDNS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.93   Med: -2.77   Max: -1.25
Current: -2.47

-5.93
-1.25

During the past 13 years, the highest Beneish M-Score of Cadence Design Systems was -1.25. The lowest was -5.93. And the median was -2.77.


Cadence Design Systems Beneish M-Score Historical Data

The historical data trend for Cadence Design Systems'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.

Cadence Design Systems Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.25 -2.68 -2.53 -1.89 -2.76

Cadence Design Systems Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
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 -1.77 -2.07 -2.76 -2.46 -2.47

Competitive Comparison

For the Software - Application subindustry, Cadence Design Systems'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.

   

Cadence Design Systems Beneish M-Score Distribution

For the Software industry and Technology sector, Cadence Design Systems's Beneish M-Score distribution charts can be found below:

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



Cadence Design Systems 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 Cadence Design Systems 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 * 1.0287+0.528 * 0.992+0.404 * 1.104+0.892 * 1.1869+0.115 * 0.9627
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9283+4.679 * -0.061-0.327 * 0.8249
=-2.47

* 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 (Jun21) TTM:Last Year (Jun20) TTM:
Accounts Receivable was $251 Mil.
Revenue was 728.285 + 736.028 + 759.909 + 666.607 = $2,891 Mil.
Gross Profit was 651.526 + 652.067 + 686.373 + 584.323 = $2,574 Mil.
Total Current Assets was $1,457 Mil.
Total Assets was $4,123 Mil.
Property, Plant and Equipment(Net PPE) was $302 Mil.
Depreciation, Depletion and Amortization(DDA) was $148 Mil.
Selling, General, & Admin. Expense(SGA) was $705 Mil.
Total Current Liabilities was $927 Mil.
Long-Term Debt & Capital Lease Obligation was $347 Mil.
Net Income was 155.9 + 187.169 + 173.738 + 161.63 = $678 Mil.
Non Operating Income was 2.612 + 2.978 + -8.278 + 1.753 = $-1 Mil.
Cash Flow from Operations was 380.376 + 208.442 + 135.522 + 206.557 = $931 Mil.
Accounts Receivable was $205 Mil.
Revenue was 638.418 + 617.957 + 599.555 + 579.603 = $2,436 Mil.
Gross Profit was 563.203 + 543.54 + 526.227 + 518.628 = $2,152 Mil.
Total Current Assets was $1,640 Mil.
Total Assets was $3,999 Mil.
Property, Plant and Equipment(Net PPE) was $283 Mil.
Depreciation, Depletion and Amortization(DDA) was $131 Mil.
Selling, General, & Admin. Expense(SGA) was $639 Mil.
Total Current Liabilities was $1,152 Mil.
Long-Term Debt & Capital Lease Obligation was $346 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)
=(250.812 / 2890.829) / (205.415 / 2435.533)
=0.08676127 / 0.08434088
=1.0287

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)
=(2151.598 / 2435.533) / (2574.289 / 2890.829)
=0.88341977 / 0.890502
=0.992

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 - (1457.067 + 301.979) / 4122.548) / (1 - (1639.783 + 282.738) / 3999.497)
=0.57331097 / 0.5193093
=1.104

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
=2890.829 / 2435.533
=1.1869

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))
=(131.054 / (131.054 + 282.738)) / (148.048 / (148.048 + 301.979))
=0.31671468 / 0.32897582
=0.9627

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)
=(704.51 / 2890.829) / (639.385 / 2435.533)
=0.24370518 / 0.26252364
=0.9283

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)
=((347.186 + 926.716) / 4122.548) / ((346.394 + 1151.887) / 3999.497)
=0.30900841 / 0.37461736
=0.8249

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
=(678.437 - -0.935 - 930.897) / 4122.548
=-0.061

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.

Cadence Design Systems has a M-score of -2.47 suggests that the company is unlikely to be a manipulator.


Cadence Design Systems Beneish M-Score Related Terms

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Cadence Design Systems Business Description

Cadence Design Systems logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Traded in Other Exchanges
Address
2655 Seely Avenue, Building 5, San Jose, CA, USA, 95134
Cadence Design Systems was founded in 1988 after the merger of ECAD and SDA Systems. Cadence is known as an electronic design automation, or EDA, firm that specializes in developing software, hardware, and intellectual property that automates the design and verification of integrated circuits or larger chip systems. Historically, semiconductor firms have relied on the firm's tools, but there has been a shift toward other nontraditional "systems" users given the development of the Internet of Things, artificial intelligence, autonomous vehicles, and cloud computing. Cadence is headquartered in Silicon Valley, has approximately 8,100 employees worldwide, and was added to the S&P 500 in late 2017.
Executives
Teng Chin-chi officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Tan Lip Bu director, officer: CEO ONE CALIFORNIA STREET 28TH FLOOR SAN FRANCISCO CA 94111
Beckley Thomas P officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Wall John M officer: Sr. VP & CFO 2655 SEELY AVENUE SAN JOSE CA 95134
Mandava Surendra Babu officer: Sr. Vice President 47211 LAKEVIEW BLVD FREMONT CA 94538
Devgan Anirudh officer: President 2655 SEELY AVENUE SAN JOSE CA 95134
Zaman Aneel officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Bostrom Susan L director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BOSTROM SUSAN L a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Flaminia Alinka officer: Sr. VP, Chief Legal Officer 3975 FREEDOM CIRCLE SANTA CLARA CA 95054
Siboni Roger S director 1900 SOUTH NORFOLK STREET SAN MATEO CA 94403
Cowie James J officer: Sr. VP, General Counsel 2655 SEELY AVENUE BLDG. 5 SAN JOSE CA 95134
Chew Lewis director DOLBY LABORATORIES, INC. 1275 MARKET STREET SAN FRANCISCO CA 94103
Brennan Ita M director 5453 GREAT AMERICA PARKWAY SANTA CLARA CA 95054
Adams Mark director 834 TERRACE DRIVE LOS ALTOS CA 94024
Wilderotter Mary Agnes director 115 ALPINE TERRACE OAKLAND CA 94618

Cadence Design Systems Headlines

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