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Mohawk Industries Inc (NYSE:MHK)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

MHK' s Beneish M-Score Range Over the Past 10 Years
Min: -4.48   Max: 0.03
Current: -2.6

-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 * 0.9558+0.528 * 0.9115+0.404 * 0.9878+0.892 * 1.0974+0.115 * 0.9795
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9348+4.679 * -0.0337-0.327 * 0.8849
=-2.60

* 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 $1,466 Mil.
Revenue was 2310.336 + 2172.046 + 1997.997 + 2150.656 = $8,631 Mil.
Gross Profit was 755.588 + 639.679 + 622.21 + 661.404 = $2,679 Mil.
Total Current Assets was $3,519 Mil.
Total Assets was $10,313 Mil.
Property, Plant and Equipment(Net PPE) was $3,244 Mil.
Depreciation, Depletion and Amortization(DDA) was $390 Mil.
Selling, General & Admin. Expense(SGA) was $1,545 Mil.
Total Current Liabilities was $3,130 Mil.
Long-Term Debt was $1,161 Mil.
Net Income was 255.188 + 171.548 + 191.559 + 214.905 = $833 Mil.
Non Operating Income was 5.807 + -3.429 + -11.525 + -4.249 = $-13 Mil.
Cash Flow from Operations was 411.62 + 137.76 + 254.921 + 389.433 = $1,194 Mil.
Accounts Receivable was $1,398 Mil.
Revenue was 2041.733 + 1881.177 + 1951.446 + 1990.658 = $7,865 Mil.
Gross Profit was 615.129 + 511.943 + 541.603 + 556.422 = $2,225 Mil.
Total Current Assets was $3,609 Mil.
Total Assets was $10,166 Mil.
Property, Plant and Equipment(Net PPE) was $3,015 Mil.
Depreciation, Depletion and Amortization(DDA) was $354 Mil.
Selling, General & Admin. Expense(SGA) was $1,506 Mil.
Total Current Liabilities was $3,002 Mil.
Long-Term Debt was $1,778 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)
=(1466.004 / 8631.035) / (1397.615 / 7865.014)
=0.16985263 / 0.17770026
=0.9558

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)
=(2225.097 / 7865.014) / (2678.881 / 8631.035)
=0.28291075 / 0.31037772
=0.9115

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 - (3519.203 + 3243.838) / 10312.831) / (1 - (3608.622 + 3014.751) / 10165.67)
=0.34421101 / 0.34845682
=0.9878

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
=8631.035 / 7865.014
=1.0974

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))
=(354.499 / (354.499 + 3014.751)) / (390.388 / (390.388 + 3243.838))
=0.105216 / 0.10741985
=0.9795

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)
=(1544.541 / 8631.035) / (1505.694 / 7865.014)
=0.178952 / 0.191442
=0.9348

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)
=((1160.7 + 3129.734) / 10312.831) / ((1777.828 + 3001.531) / 10165.67)
=0.41602873 / 0.47014698
=0.8849

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
=(833.2 - -13.396 - 1193.734) / 10312.831
=-0.0337

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 -2.60 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.89790.94030.94231.23640.91611.06910.96741.22640.94581.1116
GMI 0.92221.01241.09511.1040.87441.05010.97540.98490.94680.9243
AQI 0.99721.02910.71980.99391.01160.95210.9680.97470.98551.1355
SGI 1.19420.95950.89990.78290.99531.06081.02581.26971.06191.0344
DEPI 0.60430.94671.01070.91830.96711.00981.04281.38460.90511.097
SGAI 1.06381.02151.07371.15140.92010.95390.9830.97440.94691.101
LVGI 0.87230.79711.140.98970.91780.96170.92241.18860.99411.1089
TATA -0.0411-0.0204-0.3123-0.1069-0.0239-0.0182-0.0535-0.0197-0.0144-0.0281
M-score -2.65-2.59-4.20-2.94-2.70-2.42-2.73-2.15-2.58-2.51

Mohawk Industries Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.05990.84650.92970.94581.02121.14951.06661.11161.150.9558
GMI 0.97410.9520.94790.94680.95060.95170.94130.92430.91440.9115
AQI 1.07230.96810.9360.98550.96521.15811.18841.13551.17610.9878
SGI 1.30841.21571.13351.06191.02561.01521.0321.03441.06241.0974
DEPI 1.2490.91490.89160.90510.90850.99951.01261.0971.12640.9795
SGAI 1.00750.97571.00330.92440.99581.03031.02561.1010.94130.9348
LVGI 0.97670.92890.9830.99411.00281.13471.08431.10891.03490.8849
TATA -0.0122-0.0061-0.0044-0.0144-0.0248-0.0311-0.0407-0.0281-0.0304-0.0337
M-score -2.16-2.48-2.51-2.57-2.60-2.49-2.57-2.51-2.39-2.60
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