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Mueller Industries Inc (NYSE:MLI)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

MLI' s 10-Year Beneish M-Score Range
Min: -4.05   Max: -1.43
Current: -2.68

-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 * 0.8991+0.528 * 1.0032+0.404 * 0.8743+0.892 * 1.0708+0.115 * 0.9699
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9609+4.679 * -0.0298-0.327 * 0.9414
=-2.68

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $308 Mil.
Revenue was 537.242 + 537.342 + 602.82 + 649.691 = $2,327 Mil.
Gross Profit was 76.408 + 68.453 + 81.542 + 91.916 = $318 Mil.
Total Current Assets was $941 Mil.
Total Assets was $1,325 Mil.
Property, Plant and Equipment(Net PPE) was $245 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General & Admin. Expense(SGA) was $140 Mil.
Total Current Liabilities was $224 Mil.
Long-Term Debt was $205 Mil.
Net Income was 21.978 + 17.986 + 23.823 + 35.045 = $99 Mil.
Non Operating Income was 0.105 + -1.256 + 0.225 + 0.127 = $-1 Mil.
Cash Flow from Operations was 3.89 + 86.401 + 55.085 + -6.209 = $139 Mil.
Accounts Receivable was $320 Mil.
Revenue was 574.374 + 487.715 + 528.854 + 582.282 = $2,173 Mil.
Gross Profit was 78.597 + 65.903 + 72.552 + 81.157 = $298 Mil.
Total Current Assets was $885 Mil.
Total Assets was $1,283 Mil.
Property, Plant and Equipment(Net PPE) was $244 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $136 Mil.
Total Current Liabilities was $235 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)
=(307.984 / 2327.095) / (319.902 / 2173.225)
=0.13234698 / 0.14720151
=0.8991

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)
=(68.453 / 2173.225) / (76.408 / 2327.095)
=0.13721957 / 0.13678814
=1.0032

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 - (941.131 + 244.909) / 1324.83) / (1 - (885.213 + 243.905) / 1282.829)
=0.10476061 / 0.11982189
=0.8743

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
=2327.095 / 2173.225
=1.0708

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))
=(32.309 / (32.309 + 243.905)) / (33.585 / (33.585 + 244.909))
=0.1169709 / 0.12059506
=0.9699

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)
=(139.684 / 2327.095) / (135.754 / 2173.225)
=0.06002505 / 0.06246661
=0.9609

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 + 224.16) / 1324.83) / ((206 + 235.431) / 1282.829)
=0.3239359 / 0.34410744
=0.9414

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
=(98.832 - -0.799 - 139.167) / 1324.83
=-0.0298

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 -2.68 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98320.78131.06730.71511.72680.88420.79111.19711.01740.9238
GMI 1.10211.0841.15671.08710.89351.02871.10720.95860.94921.0131
AQI 0.93720.83320.98810.92380.80170.90850.93411.28860.91991.03
SGI 1.25441.45151.07440.94830.60481.33131.17380.90580.98571.0953
DEPI 0.91971.00150.93030.90370.97960.95190.97621.2881.01670.9699
SGAI 0.95450.76240.9461.00741.40930.84480.88271.07861.03050.9409
LVGI 1.00020.87090.95810.71570.95030.96960.97751.53830.8080.9788
TATA -0.02620.0672-0.0549-0.0943-0.06140.0258-0.0515-0.02320.03250.0089
M-score -2.36-1.90-2.52-3.13-2.64-2.16-2.70-2.55-2.32-2.39

Mueller Industries Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.19711.04991.06351.20021.01741.0261.15830.99840.92380.8991
GMI 0.95860.97840.93810.95760.94920.93220.9660.99021.01311.0032
AQI 1.28861.33841.11560.77330.91991.10621.151.31631.030.8743
SGI 0.90580.94110.96050.99890.98571.00061.03731.06431.09531.0708
DEPI 1.2881.1911.14850.98641.01671.03211.01911.05360.96990.9699
SGAI 1.07861.06561.05331.03561.03051.02350.97970.96270.94090.9609
LVGI 1.53831.43071.89480.88770.8080.8050.950.92440.97880.9414
TATA -0.0232-0.02690.00550.05160.03250.0560.06390.02750.0089-0.0298
M-score -2.55-2.62-2.70-2.14-2.32-2.12-1.94-2.14-2.39-2.68
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