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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 Cenveo Inc was -1.29. The lowest was -4.34. And the median was -2.71.
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 Cenveo Inc 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 * 0.818||+||0.528 * 0.9908||+||0.404 * 1.1457||+||0.892 * 1.0428||+||0.115 * 0.7736|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9559||+||4.679 * -0.0258||-||0.327 * 1.0427|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $245 Mil.|
Revenue was 419.783 + 460.857 + 475.105 + 641.247 = $1,997 Mil.
Gross Profit was 72.374 + 76.752 + 77.217 + 90.364 = $317 Mil.
Total Current Assets was $488 Mil.
Total Assets was $1,136 Mil.
Property, Plant and Equipment(Net PPE) was $220 Mil.
Depreciation, Depletion and Amortization(DDA) was $59 Mil.
Selling, General & Admin. Expense(SGA) was $216 Mil.
Total Current Liabilities was $350 Mil.
Long-Term Debt was $1,238 Mil.
Net Income was -3.243 + -2.405 + -7.679 + -18.499 = $-32 Mil.
Non Operating Income was -1.332 + 0.473 + -0.216 + -47.511 = $-49 Mil.
Cash Flow from Operations was 16.474 + 5.815 + -7.444 + 31.176 = $46 Mil.
|Accounts Receivable was $287 Mil.
Revenue was 435.595 + 479.41 + 490.119 + 509.873 = $1,915 Mil.
Gross Profit was 65.636 + 79.974 + 74.962 + 80.334 = $301 Mil.
Total Current Assets was $520 Mil.
Total Assets was $1,206 Mil.
Property, Plant and Equipment(Net PPE) was $289 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $217 Mil.
Total Current Liabilities was $373 Mil.
Long-Term Debt was $1,245 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)|
|=||(245.203 / 1996.992)||/||(287.45 / 1914.997)|
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)|
|=||(76.752 / 1914.997)||/||(72.374 / 1996.992)|
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 - (487.898 + 219.563) / 1135.715)||/||(1 - (520.041 + 289.283) / 1206.366)|
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))|
|=||(56.757 / (56.757 + 289.283))||/||(59.076 / (59.076 + 219.563))|
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)|
|=||(216.039 / 1996.992)||/||(216.73 / 1914.997)|
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)|
|=||((1237.988 + 349.971) / 1135.715)||/||((1245.086 + 372.628) / 1206.366)|
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|
|=||(-31.826 - -48.586||-||46.021)||/||1135.715|
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.
Cenveo Inc has a M-score of -2.71 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
Cenveo Inc Annual Data
Cenveo Inc Quarterly Data