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Avnet earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score40 / 100 · grade D · rank 961 of 1027

Avnet (AVT) scores 40 of 100 for earnings quality, grade D: rank 961 of 1027 companies and 254 of 287 in industrials. It loses the most points on accruals of +4.5% of assets, higher than 95% of companies, Beneish M-score -1.94: in the grey zone, discretionary accruals of +13.2% of assets (modified Jones), larger than most. It earns full or near-full marks for Dechow F-score 1.15 (above normal), profit steadier than cash flow (smoothness 0.55). Revenue grew 44% in the year: fast growth raises accruals, the Beneish and Dechow scores and the C-score by construction, so a growing company scores lower than a steady one with the same accounting.

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of +4.5% of assets, higher than 95% of companies120
Beneish M-scoreBeneish M-score -1.94: in the grey zone515
Dechow F-scoreDechow F-score 1.15 (above normal)1415
Montier C-scoreMontier C-score 3 of 6 checks failed815
Discretionary accrualsdiscretionary accruals of +13.2% of assets (modified Jones), larger than most110
Piotroski F-scorePiotroski F-score 5 of 9610
Non-GAAP gapadjusted earnings 20% below GAAP310
Earnings smoothnessprofit steadier than cash flow (smoothness 0.55)45
AVT: share of the available points, by componentAVT: share of the available points, by componentAccruals4%Discretionary accruals7%Beneish M-score36%Dechow F-score90%Montier C-score50%Piotroski F-score56%Non-GAAP gap34%Earnings smoothness70%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

Every company ranked → The full quality workbench, live → Avnet: cash flow →

Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.