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Meredith Corp (NYSE:MDP)
Beneish M-Score
-2.55 (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.

Meredith Corp has a M-score of -2.55 suggests that the company is not a manipulator.

MDP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -2.09
Current: -2.55

-3.45
-2.09

During the past 13 years, the highest Beneish M-Score of Meredith Corp was -2.09. The lowest was -3.45. And the median was -2.58.


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 Meredith 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 * 0.9624+0.528 * 1.0121+0.404 * 1.0113+0.892 * 1.0568+0.115 * 0.8211
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0147+4.679 * -0.0189-0.327 * 0.9428
=-2.55

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $295 Mil.
Revenue was 406.413 + 384.666 + 425.908 + 398.179 = $1,615 Mil.
Gross Profit was 255.348 + 231.488 + 263.585 + 243.731 = $994 Mil.
Total Current Assets was $531 Mil.
Total Assets was $2,878 Mil.
Property, Plant and Equipment(Net PPE) was $200 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $724 Mil.
Total Current Liabilities was $510 Mil.
Long-Term Debt was $730 Mil.
Net Income was 32.519 + 11.029 + 42.579 + 25.256 = $111 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 44.873 + 2.829 + 69.052 + 48.926 = $166 Mil.
Accounts Receivable was $290 Mil.
Revenue was 398.905 + 371.184 + 390.794 + 367.414 = $1,528 Mil.
Gross Profit was 258.622 + 229.297 + 241.529 + 222.648 = $952 Mil.
Total Current Assets was $523 Mil.
Total Assets was $2,803 Mil.
Property, Plant and Equipment(Net PPE) was $213 Mil.
Depreciation, Depletion and Amortization(DDA) was $64 Mil.
Selling, General & Admin. Expense(SGA) was $675 Mil.
Total Current Liabilities was $484 Mil.
Long-Term Debt was $796 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)
=(294.611 / 1615.166) / (289.658 / 1528.297)
=0.18240292 / 0.18952991
=0.9624

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)
=(231.488 / 1528.297) / (255.348 / 1615.166)
=0.62297839 / 0.61551073
=1.0121

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 - (531.454 + 199.554) / 2878.433) / (1 - (522.677 + 212.529) / 2802.569)
=0.7460396 / 0.73766712
=1.0113

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
=1615.166 / 1528.297
=1.0568

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))
=(63.57 / (63.57 + 212.529)) / (77.759 / (77.759 + 199.554))
=0.2302435 / 0.28040157
=0.8211

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)
=(723.836 / 1615.166) / (674.956 / 1528.297)
=0.4481496 / 0.44163929
=1.0147

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)
=((730 + 510.093) / 2878.433) / ((796.25 + 484.413) / 2802.569)
=0.43082226 / 0.45696038
=0.9428

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
=(111.383 - 0 - 165.68) / 2878.433
=-0.0189

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.

Meredith Corp has a M-score of -2.55 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.

Meredith Corp Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.05631.07950.89910.91781.18020.9411.03241.00851.11111.0179
GMI 0.98280.98231.04261.04630.92360.96931.00350.97351.00770.9834
AQI 1.040.98811.03280.96370.98431.03781.04170.9961.01691.0279
SGI 1.28271.03490.96070.90750.9851.00920.9831.06880.99821.0854
DEPI 0.92491.04380.95621.05491.03171.08721.03890.98411.04070.8593
SGAI 1.07311.00550.99531.04631.06850.97721.04791.02171.00350.9776
LVGI 1.26830.85981.00431.05460.91220.81961.15040.9411.23481.0178
TATA -0.0098-0.0108-0.0589-0.1725-0.0508-0.0509-0.0385-0.0306-0.0254-0.0195
M-score -2.32-2.39-2.85-3.45-2.59-2.69-2.68-2.56-2.56-2.49

Meredith Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.01271.04741.05891.11111.10491.16551.05151.01790.97370.9624
GMI 0.98040.98880.99781.00771.00350.99320.98690.98340.99451.0121
AQI 1.00561.00341.0291.01691.01641.02421.03121.02791.01861.0113
SGI 1.05041.02251.00410.99821.00671.04171.06431.08541.08371.0568
DEPI 1.00310.99541.03611.04070.98681.01190.9090.85930.86370.8211
SGAI 1.02431.01441.02321.00350.99190.9830.97930.97761.00861.0147
LVGI 0.92880.94151.1111.23481.23841.33841.13741.01781.04040.9428
TATA -0.0231-0.0241-0.0262-0.0254-0.0302-0.0228-0.0266-0.0195-0.0228-0.0189
M-score -2.52-2.52-2.57-2.56-2.59-2.50-2.55-2.49-2.56-2.55
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