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Cantel Medical Corp (NYSE:CMN)
Beneish M-Score
-2.61 (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 -2.61 suggests that the company is not a manipulator.

CMN' s 10-Year Beneish M-Score Range
Min: -3.19   Max: 0.34
Current: -2.61

-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 -2.42.


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 * 0.9479+0.528 * 0.9877+0.404 * 0.9567+0.892 * 1.1477+0.115 * 1.0993
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.043+4.679 * -0.0322-0.327 * 1.1235
=-2.61

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $65.2 Mil.
Revenue was 135.43 + 136.811 + 131.377 + 120.058 = $523.7 Mil.
Gross Profit was 60.591 + 60.514 + 57.047 + 52.418 = $230.6 Mil.
Total Current Assets was $178.0 Mil.
Total Assets was $567.7 Mil.
Property, Plant and Equipment(Net PPE) was $61.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.7 Mil.
Selling, General & Admin. Expense(SGA) was $146.0 Mil.
Total Current Liabilities was $62.3 Mil.
Long-Term Debt was $95.5 Mil.
Net Income was 11.085 + 11.239 + 10.705 + 10.249 = $43.3 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 6.135 + 12.703 + 23.545 + 19.178 = $61.6 Mil.
Accounts Receivable was $59.9 Mil.
Revenue was 119.042 + 118.272 + 113.973 + 105.009 = $456.3 Mil.
Gross Profit was 52.335 + 51.499 + 49.114 + 45.484 = $198.4 Mil.
Total Current Assets was $148.0 Mil.
Total Assets was $493.2 Mil.
Property, Plant and Equipment(Net PPE) was $47.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.1 Mil.
Selling, General & Admin. Expense(SGA) was $122.0 Mil.
Total Current Liabilities was $47.5 Mil.
Long-Term Debt was $74.5 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)
=(65.217 / 523.676) / (59.947 / 456.296)
=0.12453693 / 0.13137744
=0.9479

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)
=(60.514 / 456.296) / (60.591 / 523.676)
=0.43487561 / 0.44029133
=0.9877

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 - (177.961 + 61.408) / 567.675) / (1 - (147.963 + 47.072) / 493.185)
=0.57833443 / 0.60453988
=0.9567

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
=523.676 / 456.296
=1.1477

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))
=(18.061 / (18.061 + 47.072)) / (20.715 / (20.715 + 61.408))
=0.27729415 / 0.25224359
=1.0993

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)
=(145.993 / 523.676) / (121.964 / 456.296)
=0.27878497 / 0.26729141
=1.043

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)
=((95.5 + 62.307) / 567.675) / ((74.5 + 47.524) / 493.185)
=0.27798829 / 0.24742034
=1.1235

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
=(43.278 - 0 - 61.561) / 567.675
=-0.0322

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 -2.61 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

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
DSRI 0.63780.81191.1260.87480.96320.99351.23260.86570.99991.0258
GMI 0.92971.09070.99851.02650.91860.94441.06120.89870.9840.9891
AQI 0.86721.67451.13910.99750.98090.97511.01781.08541.00451.0003
SGI 1.11471.40121.13981.13851.04281.05351.17411.20161.09971.1499
DEPI 0.90840.87011.00610.91150.98380.98020.92340.98220.99731.027
SGAI 1.03010.98131.03161.00590.98451.03010.98751.00880.98171.031
LVGI 0.78371.16651.0750.96890.81550.71071.13231.4820.95110.9276
TATA -0.05040.02110.0198-0.0206-0.0555-0.0324-0.0242-0.0429-0.0251-0.0392
M-score -2.98-1.94-2.12-2.56-2.72-2.54-2.23-2.80-2.50-2.49

Cantel Medical Corp Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.97461.01731.02670.99991.04691.01061.00911.02580.97160.9479
GMI 0.89360.91170.94850.9841.00330.99690.99220.98910.98370.9877
AQI 0.95550.99731.00221.00450.99960.99040.98481.00031.0020.9567
SGI 1.14581.11911.09611.09971.12911.13511.15031.14991.14351.1477
DEPI 0.85270.93980.96410.99730.990.95020.98021.0271.02381.0993
SGAI 0.98920.97450.96870.98170.9991.03341.03191.0311.04061.043
LVGI 0.76370.90130.95180.95110.94070.78680.73790.92761.03781.1235
TATA -0.0393-0.0253-0.028-0.0251-0.0248-0.0253-0.03-0.0392-0.041-0.0322
M-score -2.57-2.49-2.51-2.50-2.42-2.42-2.41-2.49-2.59-2.61
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