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Cantel Medical Corp (NYSE:CMN)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

CMN' s 10-Year Beneish M-Score Range
Min: -3.19   Max: 0.34
Current: -2.59

-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 * 0.9716+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
=-2.59

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

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

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)
=(64.048 / 507.288) / (57.648 / 443.617)
=0.1262557 / 0.12994993
=0.9716

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)
=(57.047 / 443.617) / (60.514 / 507.288)
=0.43111062 / 0.43824021
=0.9837

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 - (173.963 + 52.936) / 558.725) / (1 - (151.293 + 46.565) / 485.818)
=0.59389861 / 0.59273226
=1.002

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
=507.288 / 443.617
=1.1435

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))
=0.27653657 / 0.27012009
=1.0238

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)
=0.27311507 / 0.2624674
=1.0406

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)
=0.28195982 / 0.27168199
=1.0378

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
=(43.319 - 0 - 66.224) / 558.725
=-0.041

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.


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

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 0.86570.97461.01731.02670.99991.04691.01061.00911.02580.9716
GMI 0.89870.89360.91170.94850.9841.00330.99690.99220.98910.9837
AQI 1.08540.95550.99731.00221.00450.99960.99040.98481.00031.002
SGI 1.20161.14581.11911.09611.09971.12911.13511.15031.14991.1435
DEPI 0.98220.85270.93980.96410.99730.990.95020.98021.0271.0238
SGAI 1.00880.98920.97450.96870.98170.9991.03341.03191.0311.0406
LVGI 1.4820.76370.90130.95180.95110.94070.78680.73790.92761.0378
TATA -0.0429-0.0393-0.0253-0.028-0.0251-0.0248-0.0253-0.03-0.0392-0.041
M-score -2.80-2.57-2.49-2.51-2.50-2.42-2.42-2.41-2.49-2.59
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