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Mueller Industries Inc (NYSE:MLI)
Beneish M-Score
-2.58 (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.

Mueller Industries Inc has a M-score of -2.58 suggests that the company is not a manipulator.

MLI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.05   Max: -1.43
Current: -2.58

-4.05
-1.43

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 -2.51.


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 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 * 0.9625+0.528 * 0.9978+0.404 * 1.7036+0.892 * 0.9355+0.115 * 1.1086
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0641+4.679 * -0.0653-0.327 * 0.9561
=-2.58

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $299 Mil.
Revenue was 535.184 + 555.593 + 537.242 + 537.342 = $2,165 Mil.
Gross Profit was 68.017 + 85.228 + 76.408 + 68.453 = $298 Mil.
Total Current Assets was $825 Mil.
Total Assets was $1,374 Mil.
Property, Plant and Equipment(Net PPE) was $271 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $137 Mil.
Total Current Liabilities was $230 Mil.
Long-Term Debt was $205 Mil.
Net Income was 17.8 + 33.651 + 21.978 + 17.986 = $91 Mil.
Non Operating Income was 0.164 + 0.265 + 0.105 + -1.256 = $-1 Mil.
Cash Flow from Operations was 78.318 + 13.26 + 3.89 + 86.401 = $182 Mil.
Accounts Receivable was $333 Mil.
Revenue was 602.82 + 649.691 + 574.374 + 487.715 = $2,315 Mil.
Gross Profit was 81.542 + 91.916 + 78.597 + 65.903 = $318 Mil.
Total Current Assets was $924 Mil.
Total Assets was $1,328 Mil.
Property, Plant and Equipment(Net PPE) was $246 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General & Admin. Expense(SGA) was $138 Mil.
Total Current Liabilities was $233 Mil.
Long-Term Debt was $206 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)
=(299.417 / 2165.361) / (332.508 / 2314.6)
=0.13827579 / 0.14365679
=0.9625

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)
=(85.228 / 2314.6) / (68.017 / 2165.361)
=0.1373706 / 0.13767035
=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 - (825.499 + 270.655) / 1373.526) / (1 - (924.178 + 246.169) / 1327.736)
=0.20194157 / 0.11853938
=1.7036

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
=2165.361 / 2314.6
=0.9355

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))
=(33.699 / (33.699 + 246.169)) / (32.979 / (32.979 + 270.655))
=0.12041034 / 0.10861432
=1.1086

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)
=(137.386 / 2165.361) / (138.003 / 2314.6)
=0.06344716 / 0.05962283
=1.0641

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)
=((204.5 + 229.541) / 1373.526) / ((205.5 + 233.323) / 1327.736)
=0.31600494 / 0.33050471
=0.9561

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
=(91.415 - -0.722 - 181.869) / 1373.526
=-0.0653

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 -2.58 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.

Mueller Industries Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.78131.06730.71511.72680.88420.79111.19711.01740.92381.0297
GMI 1.0841.15671.08710.89351.02871.10720.95860.94921.01310.9807
AQI 0.83320.98810.92380.80170.90850.93411.28860.91991.031.8167
SGI 1.45151.07440.94830.60481.33131.17380.90580.98571.09530.8882
DEPI 1.00150.93030.90370.97960.95190.97621.2881.01670.96991.0854
SGAI 0.76240.9461.00741.40930.84480.88271.07861.03050.94091.0834
LVGI 0.87090.95810.71570.95030.96960.97751.53830.8080.97880.9257
TATA 0.0672-0.0549-0.0943-0.06140.0258-0.0509-0.02320.03250.0089-0.0552
M-score -1.90-2.52-3.13-2.64-2.16-2.70-2.55-2.32-2.39-2.47

Mueller Industries Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.20021.01741.0261.15830.99840.92380.89910.83870.96251.0297
GMI 0.95760.94920.93220.9660.99021.01311.00320.98810.99780.9807
AQI 0.77330.91991.10621.151.31631.030.87430.96981.70361.8167
SGI 0.99890.98571.00061.03731.06431.09531.07080.99660.93550.8882
DEPI 0.98641.01671.03211.01911.05360.96990.96991.03941.10861.0854
SGAI 1.03561.03051.02350.97970.96270.93130.95121.03251.06411.0946
LVGI 0.88770.8080.8050.950.92440.97880.94140.87730.95610.9257
TATA 0.05160.03250.0560.06390.02750.0089-0.0298-0.045-0.0653-0.0552
M-score -2.14-2.32-2.12-1.94-2.14-2.39-2.67-2.82-2.58-2.47
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