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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.
Cambrex Corporation has a M-score of -1.89 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Cambrex Corporation was -0.04. The lowest was -4.72. 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 Cambrex Corporation 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 * 1.6225||+||0.528 * 1.0119||+||0.404 * 0.7819||+||0.892 * 1.1507||+||0.115 * 1.0853|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9136||+||4.679 * -0.0116||-||0.327 * 1.0148|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $84.2 Mil.|
Revenue was 103.036 + 77.452 + 62.803 + 74.885 = $318.2 Mil.
Gross Profit was 33.938 + 24.966 + 19.251 + 24.749 = $102.9 Mil.
Total Current Assets was $202.6 Mil.
Total Assets was $458.0 Mil.
Property, Plant and Equipment(Net PPE) was $172.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.5 Mil.
Selling, General & Admin. Expense(SGA) was $47.6 Mil.
Total Current Liabilities was $97.3 Mil.
Long-Term Debt was $79.3 Mil.
Net Income was 8.899 + 3.574 + 2.274 + 11.168 = $25.9 Mil.
Non Operating Income was -5.392 + -0.513 + 0.706 + -0.449 = $-5.6 Mil.
Cash Flow from Operations was 38.589 + -4.273 + -11.09 + 13.648 = $36.9 Mil.
|Accounts Receivable was $45.1 Mil.
Revenue was 69.93 + 59.21 + 77.133 + 70.228 = $276.5 Mil.
Gross Profit was 21.083 + 18.531 + 28.445 + 22.428 = $90.5 Mil.
Total Current Assets was $144.0 Mil.
Total Assets was $385.7 Mil.
Property, Plant and Equipment(Net PPE) was $151.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.8 Mil.
Selling, General & Admin. Expense(SGA) was $45.2 Mil.
Total Current Liabilities was $82.5 Mil.
Long-Term Debt was $64.0 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)|
|=||(84.219 / 318.176)||/||(45.109 / 276.501)|
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)|
|=||(24.966 / 276.501)||/||(33.938 / 318.176)|
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 - (202.56 + 171.966) / 458.037)||/||(1 - (143.97 + 151.815) / 385.731)|
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))|
|=||(21.775 / (21.775 + 151.815))||/||(22.473 / (22.473 + 171.966))|
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)|
|=||(47.568 / 318.176)||/||(45.248 / 276.501)|
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)|
|=||((79.25 + 97.271) / 458.037)||/||((64 + 82.483) / 385.731)|
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|
|=||(25.915 - -5.648||-||36.874)||/||458.037|
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.
Cambrex Corporation has a M-score of -1.89 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
Cambrex Corporation Annual Data
Cambrex Corporation Quarterly Data