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Meredith Corp (NYSE:MDP)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

MDP' s 10-Year Beneish M-Score Range
Min: -3.45   Max: -2.09
Current: -2.57

-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 -2.60.


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 * 1.0589+0.528 * 0.9978+0.404 * 1.029+0.892 * 1.0041+0.115 * 1.0361
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0232+4.679 * -0.0262-0.327 * 1.111
=-2.57

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $241 Mil.
Revenue was 367.414 + 354.048 + 356.452 + 386.973 = $1,465 Mil.
Gross Profit was 222.648 + 221.832 + 215.675 + 242.248 = $902 Mil.
Total Current Assets was $418 Mil.
Total Assets was $2,303 Mil.
Property, Plant and Equipment(Net PPE) was $189 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $661 Mil.
Total Current Liabilities was $459 Mil.
Long-Term Debt was $450 Mil.
Net Income was 18.486 + 30.569 + 24.041 + 33.803 = $107 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 30.67 + 67.115 + -6.428 + 75.785 = $167 Mil.
Accounts Receivable was $227 Mil.
Revenue was 369.615 + 360.595 + 354.157 + 374.548 = $1,459 Mil.
Gross Profit was 228.01 + 226.478 + 213.546 + 228.741 = $897 Mil.
Total Current Assets was $399 Mil.
Total Assets was $2,065 Mil.
Property, Plant and Equipment(Net PPE) was $188 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $643 Mil.
Total Current Liabilities was $428 Mil.
Long-Term Debt was $305 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)
=(240.846 / 1464.887) / (226.522 / 1458.915)
=0.16441268 / 0.15526744
=1.0589

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)
=(221.832 / 1458.915) / (222.648 / 1464.887)
=0.61468626 / 0.61602226
=0.9978

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 - (418.25 + 188.812) / 2303.206) / (1 - (399.354 + 187.722) / 2064.774)
=0.7364274 / 0.71567058
=1.029

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
=1464.887 / 1458.915
=1.0041

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))
=(56.93 / (56.93 + 187.722)) / (54.691 / (54.691 + 188.812))
=0.23269787 / 0.22460093
=1.0361

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)
=(660.652 / 1464.887) / (643.014 / 1458.915)
=0.45099178 / 0.44074809
=1.0232

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)
=((450 + 459.016) / 2303.206) / ((305 + 428.477) / 2064.774)
=0.39467421 / 0.35523355
=1.111

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
=(106.899 - 0 - 167.142) / 2303.206
=-0.0262

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 -2.57 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 1.02251.05631.07950.89910.91781.18020.9411.03241.0085
GMI 0.99580.98280.98231.04261.04630.92360.96931.00350.9735
AQI 1.02181.040.98811.03280.96370.98431.03781.04170.996
SGI 1.04791.28271.03490.96070.90750.9851.00920.9831.0688
DEPI 0.99390.92491.04380.95621.05491.03171.08721.03890.9841
SGAI 0.9521.07311.00550.99531.04631.06850.97721.04791.0217
LVGI 0.93071.26830.85981.00431.05460.91220.81961.15040.941
TATA -0.0153-0.0098-0.0108-0.0589-0.1725-0.0508-0.0509-0.0385-0.0306
M-score -2.45-2.32-2.39-2.85-3.45-2.59-2.69-2.68-2.56

Meredith Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.04011.03241.02980.99440.95691.00851.01271.04741.05891.1111
GMI 1.01461.00350.99580.98120.97760.97350.98040.98880.99781.0077
AQI 1.05021.04171.03581.02520.99170.9961.00561.00341.0291.0169
SGI 0.95310.9831.01371.06611.08021.06881.05041.02251.00410.9982
DEPI 1.09141.03890.96670.93950.93960.98411.00310.99541.03611.3587
SGAI 1.02121.04791.03961.05251.02271.02171.02431.01441.02321.0035
LVGI 1.1591.15041.14381.11550.91630.9410.92880.94151.1111.2348
TATA -0.0372-0.0385-0.0397-0.0399-0.0338-0.0306-0.0231-0.0241-0.0262-0.0254
M-score -2.68-2.68-2.67-2.67-2.60-2.56-2.52-2.52-2.57-2.52
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