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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.
During the past 13 years, the highest Beneish M-Score of Blyth Inc was -1.33. The lowest was -4.13. And the median was -2.78.
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 * 1.0919||+||0.528 * 1.0086||+||0.404 * 0.6704||+||0.892 * 0.8121||+||0.115 * 1.0495|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0322||+||4.679 * 0.2959||-||0.327 * 1.0716|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $11.1 Mil.|
Revenue was 176.796 + 90.752 + 157.793 + 175.67 = $601.0 Mil.
Gross Profit was 115.436 + 53.495 + 101.329 + 113.48 = $383.7 Mil.
Total Current Assets was $192.9 Mil.
Total Assets was $287.4 Mil.
Property, Plant and Equipment(Net PPE) was $68.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.3 Mil.
Selling, General & Admin. Expense(SGA) was $379.8 Mil.
Total Current Liabilities was $129.3 Mil.
Long-Term Debt was $4.6 Mil.
Net Income was -12.211 + 106.173 + -4.44 + -2.762 = $86.8 Mil.
Non Operating Income was -3.552 + -0.38 + -0.072 + -0.027 = $-4.0 Mil.
Cash Flow from Operations was 42.209 + -13.254 + -6.531 + -16.669 = $5.8 Mil.
|Accounts Receivable was $12.6 Mil.
Revenue was 198.238 + 97.029 + 211.731 + 233.094 = $740.1 Mil.
Gross Profit was 132.039 + 56.281 + 135.207 + 153.076 = $476.6 Mil.
Total Current Assets was $240.1 Mil.
Total Assets was $366.8 Mil.
Property, Plant and Equipment(Net PPE) was $76.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.9 Mil.
Selling, General & Admin. Expense(SGA) was $453.1 Mil.
Total Current Liabilities was $104.1 Mil.
Long-Term Debt was $55.3 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)|
|=||(11.133 / 601.011)||/||(12.556 / 740.092)|
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)|
|=||(53.495 / 740.092)||/||(115.436 / 601.011)|
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 - (192.89 + 68.266) / 287.353)||/||(1 - (240.128 + 76.826) / 366.841)|
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))|
|=||(9.889 / (9.889 + 76.826))||/||(8.322 / (8.322 + 68.266))|
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)|
|=||(379.821 / 601.011)||/||(453.112 / 740.092)|
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)|
|=||((4.556 + 129.258) / 287.353)||/||((55.326 + 104.097) / 366.841)|
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|
|=||(86.76 - -4.031||-||5.755)||/||287.353|
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 -1.33 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