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Cantel Medical Corp (NYSE:CMN)
Beneish M-Score
-2.40 (As of Today)

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.

Cantel Medical Corp has a M-score of -2.40 suggests that the company is not a manipulator.

CMN' s 10-Year Beneish M-Score Range
Min: -3.19   Max: 0.34
Current: -2.4

-3.19
0.34

During the past 13 years, the highest Beneish M-Score of Cantel Medical Corp was 0.34. The lowest was -3.19. And the median was -2.41.


Definition

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 Cantel Medical 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 * 1.0185+0.528 * 0.9922+0.404 * 0.9848+0.892 * 1.1503+0.115 * 0.9802
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0319+4.679 * -0.03-0.327 * 0.7379
=-2.40

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $61.7 Mil.
Revenue was 120.058 + 119.042 + 118.272 + 113.973 = $471.3 Mil.
Gross Profit was 52.418 + 52.335 + 51.499 + 49.114 = $205.4 Mil.
Total Current Assets was $152.0 Mil.
Total Assets was $497.9 Mil.
Property, Plant and Equipment(Net PPE) was $48.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.4 Mil.
Selling, General & Admin. Expense(SGA) was $126.1 Mil.
Total Current Liabilities was $50.2 Mil.
Long-Term Debt was $64.5 Mil.
Net Income was 10.249 + 11.126 + 11.185 + 10.213 = $42.8 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 19.178 + 10.798 + 10.751 + 17.003 = $57.7 Mil.
Accounts Receivable was $52.7 Mil.
Revenue was 105.009 + 106.363 + 99.681 + 98.693 = $409.7 Mil.
Gross Profit was 45.484 + 45.151 + 43.727 + 42.777 = $177.1 Mil.
Total Current Assets was $145.2 Mil.
Total Assets was $484.4 Mil.
Property, Plant and Equipment(Net PPE) was $45.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.8 Mil.
Selling, General & Admin. Expense(SGA) was $106.2 Mil.
Total Current Liabilities was $56.3 Mil.
Long-Term Debt was $95.0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(61.703 / 471.345) / (52.663 / 409.746)
=0.13090836 / 0.12852596
=1.0185

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(52.335 / 409.746) / (52.418 / 471.345)
=0.43231417 / 0.43570209
=0.9922

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (152.031 + 48.498) / 497.875) / (1 - (145.183 + 45.431) / 484.364)
=0.59723023 / 0.60646539
=0.9848

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=471.345 / 409.746
=1.1503

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))
=(16.768 / (16.768 + 45.431)) / (18.399 / (18.399 + 48.498))
=0.26958633 / 0.27503475
=0.9802

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)
=(126.062 / 471.345) / (106.202 / 409.746)
=0.26745165 / 0.25918984
=1.0319

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)
=((64.5 + 50.222) / 497.875) / ((95 + 56.26) / 484.364)
=0.2304233 / 0.3122858
=0.7379

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(42.773 - 0 - 57.73) / 497.875
=-0.03

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.

Cantel Medical Corp has a M-score of -2.40 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Cantel Medical Corp Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
DSRI 1.31510.63780.81191.1260.87480.96320.99351.23260.89920.9829
GMI 1.02090.92971.09070.99851.02650.91860.94441.06120.89870.984
AQI 1.42880.86721.67451.13910.99750.98090.97511.01781.08541.0045
SGI 0.95191.11471.40121.13981.13851.04281.05351.17411.20161.0997
DEPI 0.91310.90840.87011.00610.91150.98380.98020.92340.98220.9973
SGAI 1.07691.03010.98131.03161.00590.98451.03010.98751.00880.9817
LVGI 1.02280.78371.16651.0750.96890.81550.71071.13231.4820.9511
TATA -0.0612-0.05040.02110.0198-0.0206-0.0555-0.0324-0.0242-0.0429-0.0251
M-score -2.37-2.98-1.94-2.12-2.56-2.72-2.54-2.23-2.77-2.51

Cantel Medical Corp Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.91250.85390.89920.97461.03111.03760.98291.04691.03891.0185
GMI 0.99650.94680.89870.89360.91170.94850.9841.00330.99690.9922
AQI 1.10451.08871.08540.95550.99731.00221.00450.99960.99040.9848
SGI 1.24121.22381.20161.14581.11911.09611.09971.12911.13511.1503
DEPI 1.00960.98660.98220.85270.93980.96410.99730.990.95020.9802
SGAI 0.99531.01381.00880.98920.97450.96870.98170.9991.03341.0319
LVGI 1.66781.50441.4820.76370.90130.95180.95110.94070.78680.7379
TATA -0.0299-0.0385-0.0429-0.0393-0.0253-0.028-0.0251-0.0248-0.0253-0.03
M-score -2.66-2.76-2.77-2.57-2.48-2.50-2.51-2.42-2.39-2.40
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