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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 Cambrex Corp was 0.82. The lowest was -4.74. And the median was -2.71.
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 Corp 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 * 0.9775||+||0.528 * 0.8517||+||0.404 * 0.5646||+||0.892 * 1.1671||+||0.115 * 1.2898|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9126||+||4.679 * -0.1326||-||0.327 * 0.5561|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $47.3 Mil.|
Revenue was 94.741 + 156.187 + 92.979 + 106.635 = $450.5 Mil.
Gross Profit was 38.899 + 66.261 + 35.68 + 45.945 = $186.8 Mil.
Total Current Assets was $283.8 Mil.
Total Assets was $544.2 Mil.
Property, Plant and Equipment(Net PPE) was $203.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.3 Mil.
Selling, General & Admin. Expense(SGA) was $58.2 Mil.
Total Current Liabilities was $104.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 14.582 + 17.814 + 11.747 + 19.663 = $63.8 Mil.
Non Operating Income was 0.076 + -0.059 + -1.33 + -0.716 = $-2.0 Mil.
Cash Flow from Operations was 89.771 + 3.561 + 39.841 + 4.832 = $138.0 Mil.
|Accounts Receivable was $41.5 Mil.
Revenue was 77.525 + 129.315 + 81.3 + 97.893 = $386.0 Mil.
Gross Profit was 29.079 + 45.399 + 28.406 + 33.415 = $136.3 Mil.
Total Current Assets was $233.2 Mil.
Total Assets was $481.1 Mil.
Property, Plant and Equipment(Net PPE) was $159.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.2 Mil.
Selling, General & Admin. Expense(SGA) was $54.6 Mil.
Total Current Liabilities was $106.2 Mil.
Long-Term Debt was $60.0 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)|
|=||(47.316 / 450.542)||/||(41.475 / 386.033)|
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)|
|=||(66.261 / 386.033)||/||(38.899 / 450.542)|
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 - (283.795 + 203.616) / 544.202)||/||(1 - (233.169 + 158.994) / 481.083)|
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))|
|=||(23.24 / (23.24 + 158.994))||/||(22.342 / (22.342 + 203.616))|
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)|
|=||(58.161 / 450.542)||/||(54.607 / 386.033)|
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)|
|=||((0 + 104.528) / 544.202)||/||((60 + 106.168) / 481.083)|
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|
|=||(63.806 - -2.029||-||138.005)||/||544.202|
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 Corp has a M-score of -3.03 suggests that the company will not 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 Corp Annual Data
Cambrex Corp Quarterly Data