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Mueller Industries Inc (NYSE:MLI)
Beneish M-Score
-2.12 (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 -2.12 signals that the company is a manipulator.

MLI' s 10-Year Beneish M-Score Range
Min: -4.05   Max: -1.43
Current: -2.12

-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 * 1.026+0.528 * 0.9322+0.404 * 1.1062+0.892 * 1.0006+0.115 * 1.0321
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0235+4.679 * 0.056-0.327 * 0.805
=-2.12

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was 24.706 + 15.384 + 39.864 + 91.15 = $171 Mil.
Non Operating Income was 0.088 + -0.779 + 0.842 + 0.319 = $0 Mil.
Cash Flow from Operations was -44.672 + 58.523 + 20.836 + 64.069 = $99 Mil.
Accounts Receivable was $312 Mil.
Revenue was 559.69 + 504.006 + 514.165 + 594.099 = $2,172 Mil.
Gross Profit was 76.84 + 65.287 + 64.447 + 71.248 = $278 Mil.
Total Current Assets was $785 Mil.
Total Assets was $1,143 Mil.
Property, Plant and Equipment(Net PPE) was $234 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $133 Mil.
Total Current Liabilities was $282 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)
=(319.902 / 2173.225) / (311.601 / 2171.96)
=0.14720151 / 0.14346535
=1.026

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)
=(65.903 / 2171.96) / (78.597 / 2173.225)
=0.12791304 / 0.13721957
=0.9322

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 - (885.213 + 243.905) / 1282.829) / (1 - (785.157 + 233.959) / 1142.913)
=0.11982189 / 0.10831708
=1.1062

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
=2173.225 / 2171.96
=1.0006

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))
=(32.124 / (32.124 + 233.959)) / (32.309 / (32.309 + 243.905))
=0.12072925 / 0.1169709
=1.0321

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)
=(135.754 / 2173.225) / (132.566 / 2171.96)
=0.06246661 / 0.06103519
=1.0235

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)
=((206 + 235.431) / 1282.829) / ((207.05 + 281.5) / 1142.913)
=0.34410744 / 0.42746036
=0.805

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
=(171.104 - 0.47 - 98.756) / 1282.829
=0.056

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 -2.12 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.79110.87490.96520.93161.19711.04991.06351.20021.01741.026
GMI 1.10721.0971.06450.96390.95860.97840.93810.95760.94920.9322
AQI 0.93410.93971.04621.33711.28861.33841.11560.77330.91991.1062
SGI 1.17381.02010.9470.88750.90580.94110.96050.99890.98571.0006
DEPI 0.97621.03271.07971.22621.2881.1911.14850.98641.01671.0321
SGAI 0.88271.00251.08231.09051.07861.06561.05331.03561.03051.0235
LVGI 0.97750.94850.68181.40661.53831.43071.89480.88770.8080.805
TATA -0.0515-0.0276-0.1079-0.0771-0.0232-0.02690.00550.05160.03250.056
M-score -2.70-2.66-2.91-3.01-2.55-2.62-2.70-2.14-2.32-2.12
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