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Meredith Corp (NYSE:MDP)
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.

Meredith Corp has a M-score of -2.59 suggests that the company is not a manipulator.

MDP' s 10-Year Beneish M-Score Range
Min: -3.45   Max: -2.09
Current: -2.59

-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 -2.57.


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 * 1.1049+0.528 * 1.0035+0.404 * 1.0164+0.892 * 1.0067+0.115 * 0.9868
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9919+4.679 * -0.0302-0.327 * 1.2384
=-2.59

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $264 Mil.
Revenue was 371.184 + 390.794 + 367.414 + 354.048 = $1,483 Mil.
Gross Profit was 229.297 + 241.529 + 222.648 + 221.832 = $915 Mil.
Total Current Assets was $476 Mil.
Total Assets was $2,543 Mil.
Property, Plant and Equipment(Net PPE) was $198 Mil.
Depreciation, Depletion and Amortization(DDA) was $60 Mil.
Selling, General & Admin. Expense(SGA) was $658 Mil.
Total Current Liabilities was $436 Mil.
Long-Term Debt was $659 Mil.
Net Income was 29.365 + 40.445 + 18.486 + 30.569 = $119 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 11.146 + 86.733 + 30.67 + 67.115 = $196 Mil.
Accounts Receivable was $237 Mil.
Revenue was 356.452 + 386.973 + 369.615 + 360.595 = $1,474 Mil.
Gross Profit was 215.675 + 242.248 + 228.01 + 226.478 = $912 Mil.
Total Current Assets was $408 Mil.
Total Assets was $2,131 Mil.
Property, Plant and Equipment(Net PPE) was $182 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $659 Mil.
Total Current Liabilities was $397 Mil.
Long-Term Debt was $345 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)
=(263.624 / 1483.44) / (237.025 / 1473.635)
=0.17771127 / 0.16084376
=1.1049

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)
=(241.529 / 1473.635) / (229.297 / 1483.44)
=0.61915671 / 0.61701586
=1.0035

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 - (476.024 + 197.739) / 2542.59) / (1 - (408.381 + 181.68) / 2131.096)
=0.73500918 / 0.72311853
=1.0164

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
=1483.44 / 1473.635
=1.0067

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))
=(54.497 / (54.497 + 181.68)) / (60.346 / (60.346 + 197.739))
=0.23074643 / 0.23382219
=0.9868

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)
=(657.845 / 1483.44) / (658.856 / 1473.635)
=0.44345912 / 0.44709579
=0.9919

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)
=((659.375 + 436.249) / 2542.59) / ((345 + 396.55) / 2131.096)
=0.43090864 / 0.34796649
=1.2384

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
=(118.865 - 0 - 195.664) / 2542.59
=-0.0302

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 -2.59 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.

Meredith Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.02251.05631.07950.89910.91781.18020.9411.03241.00851.1111
GMI 0.99580.98280.98231.04261.04630.92360.96931.00350.97351.0077
AQI 1.02181.040.98811.03280.96370.98431.03781.04170.9961.0169
SGI 1.04791.28271.03490.96070.90750.9851.00920.9831.06880.9982
DEPI 0.99390.92491.04380.95621.05491.03171.08721.03890.98411.0407
SGAI 0.9521.07311.00550.99531.04631.06850.97721.04791.02171.0035
LVGI 0.93071.26830.85981.00431.05460.91220.81961.15040.9411.2348
TATA -0.0153-0.0098-0.0108-0.0589-0.1725-0.0508-0.0509-0.0385-0.0306-0.0254
M-score -2.45-2.32-2.39-2.85-3.45-2.59-2.69-2.68-2.56-2.56

Meredith Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.03121.02980.99440.95691.00851.01271.04741.05891.11111.1049
GMI 1.00360.99580.98120.97760.97350.98040.98880.99781.00771.0035
AQI 1.04171.03581.02520.99170.9961.00561.00341.0291.01691.0164
SGI 0.98421.01371.06611.08021.06881.05041.02251.00410.99821.0067
DEPI 0.970.9620.92510.92520.96940.98860.99541.03611.04070.9868
SGAI 1.04931.03961.05251.02271.02171.02431.01441.02321.00350.9919
LVGI 1.15041.14381.11550.91630.9410.92880.94151.1111.23481.2384
TATA -0.0035-0.0053-0.0399-0.0338-0.0306-0.0231-0.0241-0.0262-0.0254-0.0302
M-score -2.52-2.51-2.67-2.61-2.56-2.52-2.52-2.57-2.56-2.59
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