Filing Flows

Filing Flows › Companies › Cadence Design Systems › Earnings quality

Cadence Design Systems earnings quality score

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

Score61 / 100 · grade C · rank 663 of 1027

Cadence Design Systems (CDNS) scores 61 of 100 for earnings quality, grade C: rank 663 of 1027 companies and 147 of 203 in technology. It loses the most points on adjusted earnings 38% below GAAP, accruals of -6.5% of assets, lower than 68% of companies (profit backed by cash), Montier C-score 2 of 5 checks failed. It earns full or near-full marks for profit about as variable as cash flow (smoothness 0.71).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -6.5% of assets, lower than 68% of companies (profit backed by cash)1827
Dechow F-scoreDechow F-score 1.20 (above normal)1720
Montier C-scoreMontier C-score 2 of 5 checks failed1220
Discretionary accrualsdiscretionary accruals of -3.3% of assets (modified Jones), larger than most613
Non-GAAP gapadjusted earnings 38% below GAAP013
Earnings smoothnessprofit about as variable as cash flow (smoothness 0.71)77
CDNS: share of the available points, by componentCDNS: share of the available points, by componentAccruals69%Discretionary accruals48%Dechow F-score86%Montier C-score60%Earnings smoothness100%

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 → Cadence Design Systems: 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.