Deswell Industries (Deswell Industries) Beneish M-Score : -1.12 (As of Apr. 24, 2024)

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What is Deswell Industries Beneish M-Score?

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.

Warning Sign:

Beneish M-Score -1.12 higher than -1.78, which implies that the company might have manipulated its financial results.

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

DSWL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.06 Med: -2.27 Max: 10000000
Current: -1.12

During the past 13 years, the highest Beneish M-Score of Deswell Industries was 10000000.00. The lowest was -3.06. And the median was -2.27.

Deswell Industries Beneish M-Score Historical Data

The historical data trend for Deswell Industries'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.

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Deswell Industries Beneish M-Score Chart

Deswell Industries Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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-2.45

-2.27

-1.12

Deswell Industries Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Beneish M-Score	Get a 7-Day Free Trial															-	-2.27	-	-1.12	-

Competitive Comparison of Deswell Industries's Beneish M-Score

For the Electronic Components subindustry, Deswell Industries'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.

Deswell Industries's Beneish M-Score Distribution in the Hardware Industry

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

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

Deswell Industries 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 Deswell Industries for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9621

0.528 * 0.9774

0.404 * 5.7912

0.892 * 0.8995

0.115 * 0.9807

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0821

4.679 * -0.09847

0.327 * 0.883

-1.12

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was $15.87 Mil.
Revenue was $77.34 Mil.
Gross Profit was $12.84 Mil.
Total Current Assets was $81.16 Mil.
Total Assets was $110.38 Mil.
Property, Plant and Equipment(Net PPE) was $26.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.71 Mil.
Selling, General, & Admin. Expense(SGA) was $10.97 Mil.
Total Current Liabilities was $20.25 Mil.
Long-Term Debt & Capital Lease Obligation was $0.00 Mil.
Net Income was $2.06 Mil.
Gross Profit was $-0.07 Mil.
Cash Flow from Operations was $13.00 Mil.

Total Receivables was $18.34 Mil.
Revenue was $85.98 Mil.
Gross Profit was $13.95 Mil.
Total Current Assets was $87.82 Mil.
Total Assets was $115.41 Mil.
Property, Plant and Equipment(Net PPE) was $27.02 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.74 Mil.
Selling, General, & Admin. Expense(SGA) was $11.27 Mil.
Total Current Liabilities was $23.97 Mil.
Long-Term Debt & Capital Lease Obligation was $0.00 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)
	=	(15.868 / 77.337)	/	(18.337 / 85.98)
	=	0.20518	/	0.213271
	=	0.9621

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)
	=	(13.952 / 85.98)	/	(12.839 / 77.337)
	=	0.16227	/	0.166014
	=	0.9774

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 - (81.16 + 26.051) / 110.379)	/	(1 - (87.822 + 27.017) / 115.411)
	=	0.028701	/	0.004956
	=	5.7912

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
	=	77.337	/	85.98
	=	0.8995

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))
	=	(1.736 / (1.736 + 27.017))	/	(1.709 / (1.709 + 26.051))
	=	0.060376	/	0.061563
	=	0.9807

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)
	=	(10.966 / 77.337)	/	(11.267 / 85.98)
	=	0.141795	/	0.131042
	=	1.0821

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)
	=	((0 + 20.246) / 110.379)	/	((0 + 23.974) / 115.411)
	=	0.183423	/	0.207727
	=	0.883

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
	=	(2.059 - -0.07	-	12.998)	/	110.379
	=	-0.09847

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.

Deswell Industries has a M-score of -1.12 signals that the company is likely to be a manipulator.

Deswell Industries Beneish M-Score Related Terms

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Deswell Industries (Deswell Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Deswell Industries Inc (NAS:DSWL) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

DW2:Germany

Address

10B, Edificio Associacao Industrial De Macau, No. 32-36 Rua do Comandante Mata e Oliveira, Macao, MAC

Website

https://www.deswell.com

Deswell Industries Inc is engaged in the manufacturing and selling of injection-molded plastic parts and components. In addition, it also offers manufacturing services for electronic products and subassemblies and manufactures metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. The company conducts all of its manufacturing activities at separate plastics, electronics and metallic operation factories located in the People's Republic of China. It operates through the Plastic Injection Molding and Electronic Products Assembling segments. The firm offers products such as automobile components, medical testing equipment, parts for audio equipment, av receivers, active subwoofers, digital system key sets, communication products and others.