This module uses fundamental data of Analog Devices to approximate the value of its Beneish M Score. Analog Devices M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Analog Devices Piotroski F Score and Analog Devices Altman Z Score analysis.
As of now, Analog Devices' Long Term Debt is increasing as compared to previous years. The Analog Devices' current Long Term Debt Total is estimated to increase to about 7.9 B, while Short and Long Term Debt is projected to decrease to under 524.2 M. As of now, Analog Devices' ROIC is decreasing as compared to previous years. The Analog Devices' current Inventory Turnover is estimated to increase to 3.14, while Price To Sales Ratio is projected to decrease to 7.80.
At this time, it appears that Analog Devices is an unlikely manipulator. The earnings manipulation may begin if Analog Devices' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Analog Devices executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Analog Devices' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Analog Devices' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Analog Devices' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Analog Devices in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Analog Devices' degree of accounting gimmicks and manipulations.
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Other Operating Expenses
7.76 Billion
As of now, Analog Devices' Other Operating Expenses is increasing as compared to previous years.
Analog Devices Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Analog Devices. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Analog Devices' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Analog Devices' managers, analysts, and investors.
Environmental
Governance
Social
About Analog Devices Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Analog Devices's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Analog Devices using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Analog Devices based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
When determining whether Analog Devices offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Analog Devices' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Analog Devices Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Analog Devices Stock:
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Is Semiconductors & Semiconductor Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Analog Devices. If investors know Analog will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Analog Devices listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.55)
Earnings Share
3.28
Revenue Per Share
19.544
Quarterly Revenue Growth
(0.25)
Return On Assets
0.0286
The market value of Analog Devices is measured differently than its book value, which is the value of Analog that is recorded on the company's balance sheet. Investors also form their own opinion of Analog Devices' value that differs from its market value or its book value, called intrinsic value, which is Analog Devices' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Analog Devices' market value can be influenced by many factors that don't directly affect Analog Devices' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Analog Devices' value and its price as these two are different measures arrived at by different means. Investors typically determine if Analog Devices is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Analog Devices' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.