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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.
During the past 13 years, the highest Beneish M-Score of Manitowoc Co Inc was -1.38. The lowest was -4.25. And the median was -2.52.
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 Manitowoc Co 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 * 0.8608||+||0.528 * 1.0527||+||0.404 * 1.0377||+||0.892 * 0.9201||+||0.115 * 0.9128|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0642||+||4.679 * -0.0243||-||0.327 * 0.9866|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $251 Mil.|
Revenue was 885.4 + 752.1 + 1037.4 + 986.3 = $3,661 Mil.
Gross Profit was 222.5 + 182.5 + 241.5 + 245.2 = $892 Mil.
Total Current Assets was $1,281 Mil.
Total Assets was $3,846 Mil.
Property, Plant and Equipment(Net PPE) was $570 Mil.
Depreciation, Depletion and Amortization(DDA) was $104 Mil.
Selling, General & Admin. Expense(SGA) was $615 Mil.
Total Current Liabilities was $970 Mil.
Long-Term Debt was $1,561 Mil.
Net Income was 23.3 + -8.4 + 33.6 + 73.1 = $122 Mil.
Non Operating Income was 1.9 + 1.4 + -5.2 + -0.3 = $-2 Mil.
Cash Flow from Operations was 55.5 + -135.7 + 237.7 + 59.8 = $217 Mil.
|Accounts Receivable was $317 Mil.
Revenue was 1012.8 + 850 + 1104.3 + 1012.1 = $3,979 Mil.
Gross Profit was 270.8 + 225.7 + 261.6 + 262.1 = $1,020 Mil.
Total Current Assets was $1,492 Mil.
Total Assets was $4,188 Mil.
Property, Plant and Equipment(Net PPE) was $602 Mil.
Depreciation, Depletion and Amortization(DDA) was $99 Mil.
Selling, General & Admin. Expense(SGA) was $628 Mil.
Total Current Liabilities was $1,047 Mil.
Long-Term Debt was $1,747 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(251 / 3661.2)||/||(316.9 / 3979.2)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(182.5 / 3979.2)||/||(222.5 / 3661.2)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1280.6 + 569.5) / 3845.5)||/||(1 - (1492.1 + 601.6) / 4187.8)|
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.
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))|
|=||(98.9 / (98.9 + 601.6))||/||(104.2 / (104.2 + 569.5))|
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)|
|=||(615.2 / 3661.2)||/||(628.3 / 3979.2)|
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)|
|=||((1561.4 + 970.1) / 3845.5)||/||((1747 + 1047.3) / 4187.8)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(121.6 - -2.2||-||217.3)||/||3845.5|
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.
Manitowoc Co Inc has a M-score of -2.77 suggests that the company will not be a manipulator.
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
Manitowoc Co Inc Annual Data
Manitowoc Co Inc Quarterly Data