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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 -2.44.
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 * 1.0059||+||0.528 * 0.9655||+||0.404 * 1.0089||+||0.892 * 1.1472||+||0.115 * 1.0294|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0345||+||4.679 * -0.0123||-||0.327 * 1.1648|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|Accounts Receivable was $73.9 Mil.|
Revenue was 153.779 + 151.255 + 141.508 + 135.43 = $582.0 Mil.
Gross Profit was 71.198 + 68.763 + 63.599 + 60.591 = $264.2 Mil.
Total Current Assets was $202.4 Mil.
Total Assets was $677.7 Mil.
Property, Plant and Equipment(Net PPE) was $69.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.6 Mil.
Selling, General & Admin. Expense(SGA) was $164.4 Mil.
Total Current Liabilities was $75.1 Mil.
Long-Term Debt was $147.5 Mil.
Net Income was 14.254 + 13.273 + 12.356 + 11.085 = $51.0 Mil.
Non Operating Income was 0 + 0 + -2.206 + 0 = $-2.2 Mil.
Cash Flow from Operations was 15.115 + 25.696 + 14.536 + 6.135 = $61.5 Mil.
|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.
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)|
|=||(73.91 / 581.972)||/||(64.048 / 507.288)|
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)|
|=||(68.763 / 507.288)||/||(71.198 / 581.972)|
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 - (202.446 + 69.16) / 677.662)||/||(1 - (173.963 + 52.936) / 558.725)|
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))|
|=||(19.591 / (19.591 + 52.936))||/||(24.605 / (24.605 + 69.16))|
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)|
|=||(164.423 / 581.972)||/||(138.548 / 507.288)|
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)|
|=||((147.5 + 75.067) / 677.662)||/||((93.5 + 64.038) / 558.725)|
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|
|=||(50.968 - -2.206||-||61.482)||/||677.662|
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 -2.47 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