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Mueller Industries Inc (NYSE:MLI)
Beneish M-Score
-2.14 (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 -2.14 signals that the company is a manipulator.

MLI' s 10-Year Beneish M-Score Range
Min: -4.05   Max: -1.43
Current: -2.14

-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 -2.49.


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 * 0.9984+0.528 * 0.9902+0.404 * 1.3163+0.892 * 1.0643+0.115 * 1.0536
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9627+4.679 * 0.0275-0.327 * 0.9244
=-2.14

* 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 $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.
Net Income was 23.823 + 35.045 + 24.706 + 15.384 = $99 Mil.
Non Operating Income was 0.225 + 0.127 + 0.088 + -0.779 = $-0 Mil.
Cash Flow from Operations was 55.085 + -6.209 + -44.672 + 58.523 = $63 Mil.
Accounts Receivable was $313 Mil.
Revenue was 528.854 + 582.282 + 559.69 + 504.006 = $2,175 Mil.
Gross Profit was 72.552 + 81.157 + 76.84 + 65.287 = $296 Mil.
Total Current Assets was $924 Mil.
Total Assets was $1,261 Mil.
Property, Plant and Equipment(Net PPE) was $223 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $135 Mil.
Total Current Liabilities was $244 Mil.
Long-Term Debt was $207 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)
=(332.508 / 2314.6) / (312.919 / 2174.832)
=0.14365679 / 0.14388192
=0.9984

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)
=(91.916 / 2174.832) / (81.542 / 2314.6)
=0.13602706 / 0.1373706
=0.9902

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 - (924.178 + 246.169) / 1327.736) / (1 - (924.343 + 222.751) / 1260.621)
=0.11853938 / 0.09005641
=1.3163

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
=2314.6 / 2174.832
=1.0643

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))
=(32.365 / (32.365 + 222.751)) / (33.699 / (33.699 + 246.169))
=0.12686386 / 0.12041034
=1.0536

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)
=(138.003 / 2314.6) / (134.694 / 2174.832)
=0.05962283 / 0.06193306
=0.9627

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)
=((205.5 + 233.323) / 1327.736) / ((206.55 + 244.172) / 1260.621)
=0.33050471 / 0.35753966
=0.9244

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
=(98.958 - -0.339 - 62.727) / 1327.736
=0.0275

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 -2.14 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.89510.98320.78131.06730.71511.72680.88420.79111.19711.0174
GMI 0.961.10211.0841.15671.08710.89351.02871.10720.95860.9492
AQI 1.35820.93720.83320.98810.92380.80170.90850.93411.28860.9199
SGI 1.38031.25441.45151.07440.94830.60481.33131.17380.90580.9857
DEPI 0.9380.91971.00150.93030.90370.97960.95190.97621.2881.0167
SGAI 0.81230.95450.76240.9461.00741.40930.84480.88271.07861.0305
LVGI 4.12981.00020.87090.95810.71570.95030.96960.97751.53830.808
TATA -0.0812-0.02620.0672-0.0549-0.0943-0.06140.0258-0.0515-0.02320.0325
M-score -3.49-2.36-1.90-2.52-3.13-2.64-2.16-2.70-2.55-2.32

Mueller Industries Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.96520.93161.19711.04991.06351.20021.01741.0261.15830.9984
GMI 1.06450.96390.95860.97840.93810.95760.94920.93220.9660.9902
AQI 1.04621.33711.28861.33841.11560.77330.91991.10621.151.3163
SGI 0.9470.88750.90580.94110.96050.99890.98571.00061.03731.0643
DEPI 1.07971.22621.2881.1911.14850.98641.01671.03211.01911.0536
SGAI 1.08231.09051.07861.06561.05331.03561.03051.02350.97970.9627
LVGI 0.68181.40661.53831.43071.89480.88770.8080.8050.950.9244
TATA -0.1079-0.0771-0.0232-0.02690.00550.05160.03250.0560.06390.0275
M-score -2.91-3.01-2.55-2.62-2.70-2.14-2.32-2.12-1.94-2.14
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