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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.
Mueller Industries Inc has a M-score of -1.94 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Mueller Industries Inc was -1.43. The lowest was -4.05. And the median was -2.49.
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 Mueller 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 * 1.1583||+||0.528 * 0.966||+||0.404 * 1.15||+||0.892 * 1.0373||+||0.115 * 1.0191|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9797||+||4.679 * 0.0639||-||0.327 * 0.95|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $367 Mil.|
Revenue was 649.691 + 574.374 + 487.715 + 528.854 = $2,241 Mil.
Gross Profit was 91.916 + 78.597 + 65.903 + 72.552 = $309 Mil.
Total Current Assets was $946 Mil.
Total Assets was $1,350 Mil.
Property, Plant and Equipment(Net PPE) was $245 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $136 Mil.
Total Current Liabilities was $268 Mil.
Long-Term Debt was $206 Mil.
Net Income was 35.045 + 24.706 + 15.384 + 39.864 = $115 Mil.
Non Operating Income was 0.127 + 0.088 + -0.779 + 0.842 = $0 Mil.
Cash Flow from Operations was -6.209 + -44.672 + 58.523 + 20.836 = $28 Mil.
|Accounts Receivable was $306 Mil.
Revenue was 582.282 + 559.69 + 504.006 + 514.165 = $2,160 Mil.
Gross Profit was 81.157 + 76.84 + 65.287 + 64.447 = $288 Mil.
Total Current Assets was $848 Mil.
Total Assets was $1,210 Mil.
Property, Plant and Equipment(Net PPE) was $238 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $134 Mil.
Total Current Liabilities was $240 Mil.
Long-Term Debt was $207 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(367.299 / 2240.634)||/||(305.706 / 2160.143)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(78.597 / 2160.143)||/||(91.916 / 2240.634)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (946.046 + 245.441) / 1349.858)||/||(1 - (848.306 + 238.141) / 1209.875)|
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.
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))|
|=||(32.301 / (32.301 + 238.141))||/||(32.585 / (32.585 + 245.441))|
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)|
|=||(136.06 / 2240.634)||/||(133.893 / 2160.143)|
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)|
|=||((205.75 + 268.153) / 1349.858)||/||((206.8 + 240.333) / 1209.875)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(114.999 - 0.278||-||28.478)||/||1349.858|
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.
Mueller Industries Inc has a M-score of -1.94 signals that the company is likely to be a manipulator.
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
Mueller Industries Inc Annual Data
Mueller Industries Inc Quarterly Data