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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.
Steelcase Inc has a M-score of -2.66 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Steelcase Inc was -2.21. The lowest was -3.56. And the median was -2.76.
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 Steelcase 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 * 1.0037||+||0.528 * 0.9707||+||0.404 * 0.7802||+||0.892 * 1.0644||+||0.115 * 1.0243|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9758||+||4.679 * -0.0309||-||0.327 * 0.9959|
|This Year (May14) TTM:||Last Year (May13) TTM:|
|Accounts Receivable was $322 Mil.|
Revenue was 723.1 + 779.4 + 784.8 + 757.6 = $3,045 Mil.
Gross Profit was 229.1 + 248.4 + 242.8 + 244.3 = $965 Mil.
Total Current Assets was $824 Mil.
Total Assets was $1,656 Mil.
Property, Plant and Equipment(Net PPE) was $378 Mil.
Depreciation, Depletion and Amortization(DDA) was $61 Mil.
Selling, General & Admin. Expense(SGA) was $764 Mil.
Total Current Liabilities was $473 Mil.
Long-Term Debt was $284 Mil.
Net Income was 21 + 23.9 + 23 + 27.6 = $96 Mil.
Non Operating Income was 3.9 + -5.1 + 3.6 + -1.2 = $1 Mil.
Cash Flow from Operations was -72.6 + 81.8 + 79.9 + 56.4 = $146 Mil.
|Accounts Receivable was $302 Mil.
Revenue was 667.1 + 721.4 + 727.2 + 744.9 = $2,861 Mil.
Gross Profit was 209.7 + 216 + 225.9 + 228.1 = $880 Mil.
Total Current Assets was $693 Mil.
Total Assets was $1,618 Mil.
Property, Plant and Equipment(Net PPE) was $356 Mil.
Depreciation, Depletion and Amortization(DDA) was $59 Mil.
Selling, General & Admin. Expense(SGA) was $735 Mil.
Total Current Liabilities was $457 Mil.
Long-Term Debt was $286 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)|
|=||(322.1 / 3044.9)||/||(301.5 / 2860.6)|
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)|
|=||(248.4 / 2860.6)||/||(229.1 / 3044.9)|
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 - (824.1 + 377.5) / 1656.2)||/||(1 - (692.7 + 356.2) / 1618.2)|
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))|
|=||(58.8 / (58.8 + 356.2))||/||(60.6 / (60.6 + 377.5))|
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)|
|=||(763.8 / 3044.9)||/||(735.4 / 2860.6)|
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)|
|=||((283.8 + 472.8) / 1656.2)||/||((285.8 + 456.5) / 1618.2)|
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|
|=||(95.5 - 1.2||-||145.5)||/||1656.2|
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.
Steelcase Inc has a M-score of -2.66 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
Steelcase Inc Annual Data
Steelcase Inc Quarterly Data