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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 * 0.955||+||0.528 * 1.0472||+||0.404 * 1.0285||+||0.892 * 0.895||+||0.115 * 0.9196|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0812||+||4.679 * -0.028||-||0.327 * 1.004|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $259 Mil.|
Revenue was 863.5 + 885.4 + 752.1 + 1037.4 = $3,538 Mil.
Gross Profit was 205.7 + 222.5 + 182.5 + 245.7 = $856 Mil.
Total Current Assets was $1,277 Mil.
Total Assets was $3,805 Mil.
Property, Plant and Equipment(Net PPE) was $552 Mil.
Depreciation, Depletion and Amortization(DDA) was $104 Mil.
Selling, General & Admin. Expense(SGA) was $610 Mil.
Total Current Liabilities was $931 Mil.
Long-Term Debt was $1,575 Mil.
Net Income was 4.8 + 23.3 + -8.4 + 33.6 = $53 Mil.
Non Operating Income was -2.1 + 1.9 + 1.4 + -5.2 = $-4 Mil.
Cash Flow from Operations was 6.3 + 55.5 + -135.7 + 237.7 = $164 Mil.
|Accounts Receivable was $303 Mil.
Revenue was 986.3 + 1012.8 + 850 + 1104.3 = $3,953 Mil.
Gross Profit was 243.9 + 270.8 + 225.7 + 261.6 = $1,002 Mil.
Total Current Assets was $1,424 Mil.
Total Assets was $4,078 Mil.
Property, Plant and Equipment(Net PPE) was $595 Mil.
Depreciation, Depletion and Amortization(DDA) was $101 Mil.
Selling, General & Admin. Expense(SGA) was $631 Mil.
Total Current Liabilities was $1,003 Mil.
Long-Term Debt was $1,672 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)|
|=||(259 / 3538.4)||/||(303 / 3953.4)|
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)|
|=||(222.5 / 3953.4)||/||(205.7 / 3538.4)|
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 - (1277.2 + 551.8) / 3804.8)||/||(1 - (1423.9 + 595) / 4077.9)|
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))|
|=||(101.2 / (101.2 + 595))||/||(103.6 / (103.6 + 551.8))|
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)|
|=||(610.4 / 3538.4)||/||(630.8 / 3953.4)|
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)|
|=||((1575.3 + 931) / 3804.8)||/||((1672.1 + 1003.4) / 4077.9)|
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|
|=||(53.3 - -4||-||163.8)||/||3804.8|
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 -2.73 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