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Beneish M-Score -0.52 higher than -2.22, which implies that it might have manipulated its financial results.
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 -0.52. The lowest was -4.29. And the median was -2.66.
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 * 0.8284||+||0.528 * 0.9906||+||0.404 * 1.2046||+||0.892 * 1.1154||+||0.115 * 0.6739|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0449||+||4.679 * 0.4231||-||0.327 * 0.9803|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $13.1 Mil.|
Revenue was 90.752 + 157.793 + 175.67 + 549.426 = $973.6 Mil.
Gross Profit was 53.495 + 101.329 + 113.48 + 369.954 = $638.3 Mil.
Total Current Assets was $176.6 Mil.
Total Assets was $282.7 Mil.
Property, Plant and Equipment(Net PPE) was $71.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.7 Mil.
Selling, General & Admin. Expense(SGA) was $619.5 Mil.
Total Current Liabilities was $117.7 Mil.
Long-Term Debt was $4.8 Mil.
Net Income was 106.173 + -4.44 + -2.762 + 9.665 = $108.6 Mil.
Non Operating Income was -0.38 + -0.072 + -0.027 + -0.032 = $-0.5 Mil.
Cash Flow from Operations was -13.254 + -6.531 + -16.669 + 25.983 = $-10.5 Mil.
|Accounts Receivable was $14.1 Mil.
Revenue was 97.029 + 211.731 + 233.094 + 331.021 = $872.9 Mil.
Gross Profit was 56.281 + 135.207 + 153.076 + 222.277 = $566.8 Mil.
Total Current Assets was $220.5 Mil.
Total Assets was $353.4 Mil.
Property, Plant and Equipment(Net PPE) was $96.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.0 Mil.
Selling, General & Admin. Expense(SGA) was $531.5 Mil.
Total Current Liabilities was $101.0 Mil.
Long-Term Debt was $55.2 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)|
|=||(13.067 / 973.641)||/||(14.142 / 872.875)|
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)|
|=||(101.329 / 872.875)||/||(53.495 / 973.641)|
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 - (176.618 + 71.11) / 282.686)||/||(1 - (220.457 + 96.642) / 353.376)|
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))|
|=||(10.968 / (10.968 + 96.642))||/||(12.671 / (12.671 + 71.11))|
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)|
|=||(619.453 / 973.641)||/||(531.491 / 872.875)|
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)|
|=||((4.794 + 117.688) / 282.686)||/||((55.187 + 100.999) / 353.376)|
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|
|=||(108.636 - -0.511||-||-10.471)||/||282.686|
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 -0.52 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