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Mueller Industries Inc (NYSE:MLI)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

MLI' s 10-Year Beneish M-Score Range
Min: -3.49   Max: -1.43
Current: -2.39

-3.49
-1.43

During the past 13 years, the highest Beneish M-Score of Mueller Industries Inc was -1.43. The lowest was -3.49. And the median was -2.55.


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 * 0.9238+0.528 * 1.0131+0.404 * 1.03+0.892 * 1.0953+0.115 * 0.9699
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9409+4.679 * 0.0089-0.327 * 0.9788
=-2.39

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $275 Mil.
Revenue was 537.342 + 602.82 + 649.691 + 574.374 = $2,364 Mil.
Gross Profit was 68.453 + 81.542 + 91.916 + 78.597 = $321 Mil.
Total Current Assets was $941 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 $139 Mil.
Total Current Liabilities was $238 Mil.
Long-Term Debt was $205 Mil.
Net Income was 17.986 + 23.823 + 35.045 + 24.706 = $102 Mil.
Non Operating Income was -1.256 + 0.225 + 0.127 + 0.088 = $-1 Mil.
Cash Flow from Operations was 86.401 + 55.085 + -6.209 + -44.672 = $91 Mil.
Accounts Receivable was $272 Mil.
Revenue was 487.715 + 528.854 + 582.282 + 559.69 = $2,159 Mil.
Gross Profit was 65.903 + 72.552 + 81.157 + 76.84 = $296 Mil.
Total Current Assets was $875 Mil.
Total Assets was $1,248 Mil.
Property, Plant and Equipment(Net PPE) was $244 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $135 Mil.
Total Current Liabilities was $219 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)
=(275.065 / 2364.227) / (271.847 / 2158.541)
=0.11634458 / 0.12594016
=0.9238

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)
=(81.542 / 2158.541) / (68.453 / 2364.227)
=0.13733906 / 0.13556566
=1.0131

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 - (941.213 + 245.91) / 1328.096) / (1 - (874.717 + 244.457) / 1247.767)
=0.10614669 / 0.1030585
=1.03

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
=2364.227 / 2158.541
=1.0953

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))
=(32.394 / (32.394 + 244.457)) / (33.735 / (33.735 + 245.91))
=0.11700879 / 0.12063509
=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)
=(139.036 / 2364.227) / (134.914 / 2158.541)
=0.05880823 / 0.0625024
=0.9409

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)
=((205.25 + 238.069) / 1328.096) / ((206.25 + 219.256) / 1247.767)
=0.33380042 / 0.34101399
=0.9788

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
=(101.56 - -0.816 - 90.605) / 1328.096
=0.0089

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 -2.39 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.93161.19711.04991.06351.20021.01741.0261.15830.99840.9238
GMI 0.96390.95860.97840.93810.95760.94920.93220.9660.99021.0131
AQI 1.33711.28861.33841.11560.77330.91991.10621.151.31631.03
SGI 0.88750.90580.94110.96050.99890.98571.00061.03731.06431.0953
DEPI 1.22621.2881.1911.14850.98641.01671.03211.01911.05360.9699
SGAI 1.09051.07861.06561.05331.03561.03051.02350.97970.96270.9409
LVGI 1.40661.53831.43071.89480.88770.8080.8050.950.92440.9788
TATA -0.0771-0.0232-0.02690.00550.05160.03250.0560.06390.02750.0089
M-score -3.01-2.55-2.62-2.70-2.14-2.32-2.12-1.94-2.14-2.39
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