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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
Blyth Inc has a M-score of -1.97 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Blyth Inc was -1.50. The lowest was -4.29. And the median was -2.67.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Blyth Inc 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 * 1.7577||+||0.528 * 1.0327||+||0.404 * 1.725||+||0.892 * 0.7248||+||0.115 * 0.8835|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0466||+||4.679 * -0.0535||-||0.327 * 0.9277|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $14.4 Mil.|
Revenue was 175.67 + 261.159 + 179.466 + 211.731 = $828.0 Mil.
Gross Profit was 113.48 + 171.776 + 112.531 + 135.207 = $533.0 Mil.
Total Current Assets was $230.6 Mil.
Total Assets was $355.3 Mil.
Property, Plant and Equipment(Net PPE) was $93.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.1 Mil.
Selling, General & Admin. Expense(SGA) was $522.0 Mil.
Total Current Liabilities was $96.9 Mil.
Long-Term Debt was $55.1 Mil.
Net Income was -2.762 + 9.665 + -8.47 + -1.358 = $-2.9 Mil.
Non Operating Income was -0.027 + -0.155 + 0.266 + -0.278 = $-0.2 Mil.
Cash Flow from Operations was -16.669 + 37.36 + -9.342 + 4.929 = $16.3 Mil.
|Accounts Receivable was $11.3 Mil.
Revenue was 233.094 + 331.021 + 268.811 + 309.468 = $1,142.4 Mil.
Gross Profit was 153.076 + 222.277 + 176.725 + 207.338 = $759.4 Mil.
Total Current Assets was $275.0 Mil.
Total Assets was $392.0 Mil.
Property, Plant and Equipment(Net PPE) was $97.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.8 Mil.
Selling, General & Admin. Expense(SGA) was $688.1 Mil.
Total Current Liabilities was $175.4 Mil.
Long-Term Debt was $5.5 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(14.4 / 828.026)||/||(11.303 / 1142.394)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(171.776 / 1142.394)||/||(113.48 / 828.026)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (230.578 + 93.498) / 355.251)||/||(1 - (275.042 + 97.059) / 392.045)|
4. SGI = Sales Growth Index
Ratio of sales 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.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation 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))|
|=||(11.818 / (11.818 + 97.059))||/||(13.095 / (13.095 + 93.498))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses 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)|
|=||(521.961 / 828.026)||/||(688.074 / 1142.394)|
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$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((55.11 + 96.929) / 355.251)||/||((5.458 + 175.413) / 392.045)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-2.925 - -0.194||-||16.278)||/||355.251|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Blyth Inc has a M-score of -1.97 signals that the company is likely to be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Blyth Inc Annual Data
Blyth Inc Quarterly Data