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Spartech Corporation (NYSE:SEH)
Beneish M-Score
-3.01 (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.

Spartech Corporation has a M-score of -2.93 suggests that the company is not a manipulator.

SEH' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -3.01
Current: -3.01

-3.35
-3.01

During the past 13 years, the highest Beneish M-Score of Spartech Corporation was -3.01. The lowest was -3.35. And the median was -3.13.


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 Spartech Corporation 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 * 0.9231+0.528 * 0.9116+0.404 * 0.9937+0.892 * 1.0427+0.115 * 0.9862
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0998+4.679 * -0.0765-0.327 * 0.97
=-2.93

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

This Year (Oct12) TTM:Last Year (Oct11) TTM:
Accounts Receivable was $151 Mil.
Revenue was 286.804 + 282.447 + 298.323 + 281.781 = $1,149 Mil.
Gross Profit was 32.737 + 27.132 + 29.823 + 21.672 = $111 Mil.
Total Current Assets was $284 Mil.
Total Assets was $545 Mil.
Property, Plant and Equipment(Net PPE) was $197 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $85 Mil.
Total Current Liabilities was $204 Mil.
Long-Term Debt was $112 Mil.
Net Income was -0.663 + 1.838 + 3.671 + -2.249 = $3 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 15.176 + 20.304 + 15.507 + -6.714 = $44 Mil.
Accounts Receivable was $156 Mil.
Revenue was 293.24 + 291.716 + 282.551 + 234.783 = $1,102 Mil.
Gross Profit was 25.214 + 26.665 + 27.077 + 18.406 = $97 Mil.
Total Current Assets was $278 Mil.
Total Assets was $550 Mil.
Property, Plant and Equipment(Net PPE) was $208 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $74 Mil.
Total Current Liabilities was $197 Mil.
Long-Term Debt was $132 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)
=(150.566 / 1149.355) / (156.432 / 1102.29)
=0.13100043 / 0.14191547
=0.9231

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)
=(27.132 / 1102.29) / (32.737 / 1149.355)
=0.08832703 / 0.0968926
=0.9116

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 - (284.226 + 197.373) / 544.633) / (1 - (277.606 + 208.074) / 549.702)
=0.11573665 / 0.11646674
=0.9937

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
=1149.355 / 1102.29
=1.0427

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))
=(32.824 / (32.824 + 208.074)) / (31.641 / (31.641 + 197.373))
=0.13625684 / 0.13816186
=0.9862

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)
=(85.227 / 1149.355) / (74.318 / 1102.29)
=0.07415202 / 0.06742146
=1.0998

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)
=((112.288 + 203.661) / 544.633) / ((132 + 196.758) / 549.702)
=0.58011358 / 0.59806586
=0.97

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
=(2.597 - 0 - 44.273) / 544.633
=-0.0765

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.

Spartech Corporation has a M-score of -2.93 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.

Spartech Corporation Annual Data

Oct03Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12
DSRI 1.12431.0740.9120.8821.08170.86131.11730.93761.07610.9231
GMI 1.07351.01591.26310.91921.05481.2520.7171.1821.2020.9116
AQI 0.9860.90661.05290.98711.03340.61221.12820.68450.62960.9937
SGI 1.06441.17321.24531.06350.97740.96340.66251.10371.07761.0427
DEPI 0.91071.0440.82520.98581.00410.81380.8941.09381.0820.9862
SGAI 0.9380.94130.96051.00231.13791.1461.26991.03380.77621.0998
LVGI 0.961.39720.94220.90411.05531.24990.86571.08291.02840.97
TATA -0.03560.0037-0.0864-0.0852-0.0632-0.3787-0.0871-0.1554-0.1153-0.0765
M-score -2.43-2.38-2.58-2.95-2.72-4.56-3.19-3.23-2.88-2.93

Spartech Corporation Quarterly Data

Jul10Oct10Jan11Apr11Jul11Oct11Jan12Apr12Jul12Oct12
DSRI 1.23660.94010.87550.90910.92711.07610.97530.92630.92260.9231
GMI 1.0371.17381.3681.33581.26151.2021.10811.03790.99060.9116
AQI 1.00970.68450.67070.65110.65220.62960.63110.64550.66680.9937
SGI 0.9031.10081.14061.1141.10471.07761.11311.11321.08161.0427
DEPI 0.95691.09381.11871.14941.14531.0821.0270.97450.95310.9862
SGAI 1.04881.02751.06091.04860.86790.77620.77490.80630.95861.0998
LVGI 0.92291.08291.13111.15461.111.02841.03561.03051.01920.97
TATA -0.064-0.1554-0.1606-0.1411-0.1325-0.1153-0.0959-0.1175-0.1315-0.0765
M-score -2.61-3.23-3.20-3.13-3.07-2.88-2.91-3.10-3.24-2.93
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