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Meredith Corp (NYSE:MDP)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

MDP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -2.2
Current: -2.86

-3.45
-2.2

During the past 13 years, the highest Beneish M-Score of Meredith Corp was -2.20. The lowest was -3.45. And the median was -2.66.


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 * 0.93+0.528 * 0.9924+0.404 * 0.9856+0.892 * 1.0348+0.115 * 0.8963
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0371+4.679 * -0.0733-0.327 * 0.94
=-2.86

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $274 Mil.
Revenue was 435.778 + 422.771 + 406.413 + 384.666 = $1,650 Mil.
Gross Profit was 284.888 + 266.032 + 255.348 + 231.488 = $1,038 Mil.
Total Current Assets was $481 Mil.
Total Assets was $2,628 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $746 Mil.
Total Current Liabilities was $478 Mil.
Long-Term Debt was $620 Mil.
Net Income was -90.515 + 80.904 + 32.519 + 11.029 = $34 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 52.977 + 125.918 + 44.873 + 2.829 = $227 Mil.
Accounts Receivable was $285 Mil.
Revenue was 425.908 + 398.179 + 398.905 + 371.184 = $1,594 Mil.
Gross Profit was 263.585 + 243.731 + 258.622 + 229.297 = $995 Mil.
Total Current Assets was $483 Mil.
Total Assets was $2,843 Mil.
Property, Plant and Equipment(Net PPE) was $214 Mil.
Depreciation, Depletion and Amortization(DDA) was $73 Mil.
Selling, General & Admin. Expense(SGA) was $695 Mil.
Total Current Liabilities was $531 Mil.
Long-Term Debt was $733 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)
=(273.927 / 1649.628) / (284.646 / 1594.176)
=0.1660538 / 0.17855369
=0.93

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)
=(995.235 / 1594.176) / (1037.756 / 1649.628)
=0.62429431 / 0.62908486
=0.9924

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 - (481.156 + 190.953) / 2628.285) / (1 - (482.531 + 213.736) / 2843.282)
=0.74427849 / 0.75511856
=0.9856

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
=1649.628 / 1594.176
=1.0348

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))
=(73.122 / (73.122 + 213.736)) / (75.887 / (75.887 + 190.953))
=0.25490661 / 0.2843914
=0.8963

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)
=(746.197 / 1649.628) / (695.319 / 1594.176)
=0.45234259 / 0.436162
=1.0371

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)
=((620 + 477.892) / 2628.285) / ((732.5 + 531.001) / 2843.282)
=0.41772182 / 0.44438118
=0.94

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
=(33.937 - 0 - 226.597) / 2628.285
=-0.0733

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 -2.86 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

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.07950.89910.91781.18430.93771.03241.00851.11111.01790.93
GMI 0.98231.04261.04630.9230.96991.00350.97351.00770.98340.9924
AQI 0.98811.03280.96370.98431.03781.04170.9961.00441.04070.9856
SGI 1.03490.96070.90750.98161.01280.9831.06880.99821.08541.0348
DEPI 1.04380.95621.05491.03171.08721.03890.98411.04020.85970.8963
SGAI 1.00550.99531.04631.0630.98241.04791.02171.00350.97761.0147
LVGI 0.85981.00431.05460.92410.80911.15040.9411.23481.01780.94
TATA -0.0231-0.0589-0.1725-0.0508-0.0509-0.0385-0.0306-0.0254-0.0195-0.0733
M-score -2.45-2.85-3.45-2.59-2.69-2.68-2.56-2.57-2.49-2.86

Meredith Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.05891.11111.10491.16551.05151.01790.97370.96240.99240.93
GMI 0.99781.00771.00350.99320.98690.98340.99451.01211.0070.9924
AQI 1.0291.00441.01641.02421.03121.04071.01861.01130.99790.9856
SGI 1.00410.99821.00671.04171.06431.08541.08371.05681.05181.0348
DEPI 1.03611.04020.98681.01190.9090.85970.86370.82110.86920.8963
SGAI 1.02321.00350.99190.9830.97930.97761.00861.01471.00091.0371
LVGI 1.1111.23481.23841.33841.13741.01781.04040.94280.90.94
TATA -0.0262-0.0254-0.0302-0.0228-0.0266-0.0195-0.0228-0.0189-0.0268-0.0733
M-score -2.57-2.57-2.59-2.50-2.55-2.49-2.56-2.55-2.55-2.86
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