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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 Cantel Medical Corp was 0.34. The lowest was -3.19. And the median was -2.42.
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 * 0.9716||+||0.528 * 0.9837||+||0.404 * 1.002||+||0.892 * 1.1435||+||0.115 * 1.0238|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0406||+||4.679 * -0.041||-||0.327 * 1.0378|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $64.0 Mil.|
Revenue was 136.811 + 131.377 + 120.058 + 119.042 = $507.3 Mil.
Gross Profit was 60.514 + 57.047 + 52.418 + 52.335 = $222.3 Mil.
Total Current Assets was $174.0 Mil.
Total Assets was $558.7 Mil.
Property, Plant and Equipment(Net PPE) was $52.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.6 Mil.
Selling, General & Admin. Expense(SGA) was $138.5 Mil.
Total Current Liabilities was $64.0 Mil.
Long-Term Debt was $93.5 Mil.
Net Income was 11.239 + 10.705 + 10.249 + 11.126 = $43.3 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 12.703 + 23.545 + 19.178 + 10.798 = $66.2 Mil.
|Accounts Receivable was $57.6 Mil.
Revenue was 118.272 + 113.973 + 105.009 + 106.363 = $443.6 Mil.
Gross Profit was 51.499 + 49.114 + 45.484 + 45.151 = $191.2 Mil.
Total Current Assets was $151.3 Mil.
Total Assets was $485.8 Mil.
Property, Plant and Equipment(Net PPE) was $46.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.8 Mil.
Selling, General & Admin. Expense(SGA) was $116.4 Mil.
Total Current Liabilities was $60.0 Mil.
Long-Term Debt was $72.0 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)|
|=||(64.048 / 507.288)||/||(57.648 / 443.617)|
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)|
|=||(57.047 / 443.617)||/||(60.514 / 507.288)|
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 - (173.963 + 52.936) / 558.725)||/||(1 - (151.293 + 46.565) / 485.818)|
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))|
|=||(17.799 / (17.799 + 46.565))||/||(19.591 / (19.591 + 52.936))|
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)|
|=||(138.548 / 507.288)||/||(116.435 / 443.617)|
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)|
|=||((93.5 + 64.038) / 558.725)||/||((72 + 59.988) / 485.818)|
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|
|=||(43.319 - 0||-||66.224)||/||558.725|
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 -2.59 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
Cantel Medical Corp Annual Data
Cantel Medical Corp Quarterly Data