Switch to:
Mohawk Industries Inc (NYSE:MHK)
Beneish M-Score
-2.51 (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.

Mohawk Industries Inc has a M-score of -2.51 suggests that the company is not a manipulator.

MHK' s 10-Year Beneish M-Score Range
Min: -4.48   Max: 0.03
Current: -2.51

-4.48
0.03

During the past 13 years, the highest Beneish M-Score of Mohawk Industries Inc was 0.03. The lowest was -4.48. And the median was -2.52.


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 Mohawk Industries 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 * 0.9297+0.528 * 0.9479+0.404 * 0.936+0.892 * 1.1335+0.115 * 0.8916
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9986+4.679 * -0.0044-0.327 * 0.983
=-2.51

* 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 $1,227 Mil.
Revenue was 1990.658 + 2048.247 + 1813.095 + 1924.104 = $7,776 Mil.
Gross Profit was 556.422 + 574.812 + 481.355 + 512.797 = $2,125 Mil.
Total Current Assets was $3,369 Mil.
Total Assets was $8,701 Mil.
Property, Plant and Equipment(Net PPE) was $2,773 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $1,444 Mil.
Total Current Liabilities was $1,831 Mil.
Long-Term Debt was $1,807 Mil.
Net Income was 151.266 + 152.75 + 81.081 + 94.651 = $480 Mil.
Non Operating Income was 2.374 + 1.555 + -4.89 + -2.656 = $-4 Mil.
Cash Flow from Operations was 225.549 + 168.88 + -71.006 + 198.19 = $522 Mil.
Accounts Receivable was $1,164 Mil.
Revenue was 1961.536 + 1976.299 + 1486.815 + 1435.659 = $6,860 Mil.
Gross Profit was 516.89 + 514.056 + 377.066 + 369.331 = $1,777 Mil.
Total Current Assets was $3,188 Mil.
Total Assets was $8,564 Mil.
Property, Plant and Equipment(Net PPE) was $2,684 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $1,276 Mil.
Total Current Liabilities was $1,385 Mil.
Long-Term Debt was $2,257 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)
=(1226.818 / 7776.104) / (1164.172 / 6860.309)
=0.15776769 / 0.16969673
=0.9297

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)
=(574.812 / 6860.309) / (556.422 / 7776.104)
=0.25907623 / 0.27332273
=0.9479

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 - (3368.814 + 2772.722) / 8701.46) / (1 - (3188.463 + 2683.984) / 8564.157)
=0.29419477 / 0.31429947
=0.936

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
=7776.104 / 6860.309
=1.1335

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))
=(286.42 / (286.42 + 2683.984)) / (336.234 / (336.234 + 2772.722))
=0.09642459 / 0.10815013
=0.8916

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)
=(1444.114 / 7776.104) / (1275.828 / 6860.309)
=0.18571177 / 0.18597238
=0.9986

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)
=((1806.821 + 1831.357) / 8701.46) / ((2257.391 + 1385.223) / 8564.157)
=0.41811121 / 0.42533246
=0.983

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
=(479.748 - -3.617 - 521.613) / 8701.46
=-0.0044

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.

Mohawk Industries Inc has a M-score of -2.51 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.

Mohawk Industries Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97941.14110.89790.94030.94231.23640.91611.06910.96741.2264
GMI 1.01151.0590.92221.01241.09511.1040.87441.05010.97540.9849
AQI 0.94741.22670.99721.02910.71980.99391.01160.95210.9680.9747
SGI 1.17621.12581.19420.95950.89990.78290.99531.06081.02581.2697
DEPI 0.86851.55820.60430.94671.01070.91830.96711.00981.04281.3846
SGAI 0.98340.9881.06381.02151.07371.15140.92010.95390.9830.9744
LVGI 0.86771.55730.87230.79711.140.98970.91780.96170.92241.1886
TATA 0.0297-0.0249-0.0411-0.0204-0.3123-0.1069-0.0239-0.0182-0.0535-0.0197
M-score -2.19-2.35-2.65-2.59-4.20-2.94-2.70-2.42-2.73-2.15

Mohawk Industries Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.98981.03480.96741.03521.30981.21161.22641.05990.84650.9297
GMI 1.03451.01350.97540.97790.98630.98080.98490.97410.9520.9479
AQI 0.95860.95320.9680.86020.93690.96690.97471.07230.96810.936
SGI 1.05681.0371.02581.02771.1181.19711.26971.30841.21571.1335
DEPI 0.96630.99751.04281.10021.57111.55061.38461.2490.91490.8916
SGAI 0.96520.98020.9830.98190.98360.96340.99811.00750.97570.9986
LVGI 1.01190.95420.92241.13951.18361.17261.18860.97670.92890.983
TATA -0.0244-0.0373-0.0535-0.0446-0.0385-0.0336-0.0197-0.0122-0.0061-0.0044
M-score -2.55-2.58-2.73-2.73-2.29-2.28-2.16-2.16-2.48-2.51
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK