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Steelcase Inc (NYSE:SCS)
Beneish M-Score
-2.53 (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.

Steelcase Inc has a M-score of -2.53 suggests that the company is not a manipulator.

SCS' s 10-Year Beneish M-Score Range
Min: -3.65   Max: -2.33
Current: -2.53

-3.65
-2.33

During the past 13 years, the highest Beneish M-Score of Steelcase Inc was -2.33. The lowest was -3.65. And the median was -2.72.


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 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 * 1.0308+0.528 * 1.0666+0.404 * 1.0388+0.892 * 0.9991+0.115 * 1.028
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9975+4.679 * -0.0268-0.327 * 1.026
=-2.53

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $332 Mil.
Revenue was 705.5 + 749.9 + 800 + 786.7 = $3,042 Mil.
Gross Profit was 216.6 + 227.6 + 214.9 + 244.4 = $904 Mil.
Total Current Assets was $783 Mil.
Total Assets was $1,648 Mil.
Property, Plant and Equipment(Net PPE) was $395 Mil.
Depreciation, Depletion and Amortization(DDA) was $61 Mil.
Selling, General & Admin. Expense(SGA) was $761 Mil.
Total Current Liabilities was $493 Mil.
Long-Term Debt was $279 Mil.
Net Income was 20 + 22.8 + 11.8 + 30.5 = $85 Mil.
Non Operating Income was 2.4 + -0.4 + 2.6 + 3.7 = $8 Mil.
Cash Flow from Operations was -35.8 + 76.7 + 23.7 + 56.4 = $121 Mil.
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.



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)
=(331.7 / 3042.1) / (322.1 / 3044.9)
=0.10903652 / 0.10578344
=1.0308

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)
=(227.6 / 3044.9) / (216.6 / 3042.1)
=0.31679201 / 0.29699878
=1.0666

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 - (783.2 + 394.9) / 1648) / (1 - (824.1 + 377.5) / 1656.2)
=0.2851335 / 0.27448376
=1.0388

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
=3042.1 / 3044.9
=0.9991

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))
=(60.6 / (60.6 + 377.5)) / (61.4 / (61.4 + 394.9))
=0.13832458 / 0.1345606
=1.028

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)
=(761.2 / 3042.1) / (763.8 / 3044.9)
=0.25022189 / 0.25084568
=0.9975

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)
=((279.3 + 493.1) / 1648) / ((283.8 + 472.8) / 1656.2)
=0.46868932 / 0.45682889
=1.026

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
=(85.1 - 8.3 - 121) / 1648
=-0.0268

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 -2.53 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.

Steelcase Inc Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
DSRI 0.92020.85521.01950.75861.20191.05090.88771.01461.02491.0367
GMI 0.96710.96390.95291.10761.02260.96310.99970.97550.95461.0563
AQI 0.99520.97871.15980.96481.15540.85671.17330.87990.80661.0399
SGI 1.09761.07961.10440.93070.71981.06341.12821.04341.04191.0237
DEPI 0.93841.05741.08280.96531.10720.96471.12260.98711.03191.0301
SGAI 0.95621.01630.95221.03541.06870.95890.94950.98380.99940.9911
LVGI 0.9731.0421.17921.00180.95621.22330.86841.02071.04371.0083
TATA -0.0544-0.0738-0.056-0.067-0.0008-0.0358-0.0331-0.0958-0.0522-0.0046
M-score -2.73-2.93-2.63-3.05-2.46-2.69-2.49-2.94-2.78-2.40

Steelcase Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.01460.94910.97921.11041.02491.00370.97790.93581.03671.0308
GMI 0.97550.96040.96280.96820.95460.97070.99361.0271.05631.0666
AQI 0.87990.90840.92110.74550.80660.78020.80381.03361.03991.0388
SGI 1.04341.0271.01541.03291.04191.06441.06981.0541.02370.9991
DEPI 0.98711.00110.99530.971.03191.02431.05491.0661.03011.028
SGAI 0.98380.99891.01260.9970.99940.97580.96360.9780.99110.9975
LVGI 1.02071.03381.03821.06311.04370.99591.01281.00921.00831.026
TATA -0.0958-0.0967-0.0856-0.0704-0.0522-0.0309-0.0312-0.0041-0.0046-0.0268
M-score -2.94-3.02-2.95-2.82-2.78-2.66-2.66-2.47-2.40-2.53
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