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Schweitzer-Mauduit International, Inc. (NYSE:SWM)
Beneish M-Score
-2.86 (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.

Schweitzer-Mauduit International, Inc. has a M-score of -2.86 suggests that the company is not a manipulator.

SWM' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -2.39
Current: -2.86

-3.28
-2.39

During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International, Inc. was -2.39. The lowest was -3.28. And the median was -2.74.


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 Schweitzer-Mauduit International, 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 * 0.8714+0.528 * 1.1871+0.404 * 1.0642+0.892 * 1.0278+0.115 * 0.7821
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1465+4.679 * -0.0707-0.327 * 1.0989
=-2.86

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $69.5 Mil.
Revenue was 181.7 + 204.3 + 203.6 + 204.7 = $794.3 Mil.
Gross Profit was 49.1 + 52.9 + 59.2 + 57.6 = $218.8 Mil.
Total Current Assets was $519.4 Mil.
Total Assets was $1,186.6 Mil.
Property, Plant and Equipment(Net PPE) was $362.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.1 Mil.
Selling, General & Admin. Expense(SGA) was $83.9 Mil.
Total Current Liabilities was $123.5 Mil.
Long-Term Debt was $437.2 Mil.
Net Income was 18.5 + 23 + 25 + 23.2 = $89.7 Mil.
Non Operating Income was 3 + 2.7 + 2.8 + -0.8 = $7.7 Mil.
Cash Flow from Operations was 74.1 + 34.4 + 39.1 + 18.3 = $165.9 Mil.
Accounts Receivable was $77.6 Mil.
Revenue was 196.5 + 185.3 + 196.5 + 194.5 = $772.8 Mil.
Gross Profit was 61.9 + 63.2 + 64.9 + 62.7 = $252.7 Mil.
Total Current Assets was $537.1 Mil.
Total Assets was $1,226.8 Mil.
Property, Plant and Equipment(Net PPE) was $393.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.3 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $146.3 Mil.
Long-Term Debt was $381.2 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)
=(69.5 / 794.3) / (77.6 / 772.8)
=0.08749843 / 0.10041408
=0.8714

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)
=(52.9 / 772.8) / (49.1 / 794.3)
=0.32699275 / 0.27546267
=1.1871

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 - (519.4 + 362) / 1186.6) / (1 - (537.1 + 393.2) / 1226.8)
=0.25720546 / 0.24168569
=1.0642

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
=794.3 / 772.8
=1.0278

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))
=(37.3 / (37.3 + 393.2)) / (45.1 / (45.1 + 362))
=0.08664344 / 0.11078359
=0.7821

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)
=(83.9 / 794.3) / (71.2 / 772.8)
=0.1056276 / 0.09213251
=1.1465

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)
=((437.2 + 123.5) / 1186.6) / ((381.2 + 146.3) / 1226.8)
=0.47252655 / 0.42998044
=1.0989

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
=(89.7 - 7.7 - 165.9) / 1186.6
=-0.0707

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.

Schweitzer-Mauduit International, Inc. has a M-score of -2.86 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.

Schweitzer-Mauduit International, Inc. Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00270.91061.03730.8050.76911.08541.11950.84931.11670.8714
GMI 1.27841.13170.84881.12530.5150.98260.89050.89481.01941.1871
AQI 1.09931.28451.46121.37020.90630.98950.92921.10142.07461.0642
SGI 1.01870.97821.0911.07430.93711.02861.08210.97190.99271.0278
DEPI 0.88440.87171.21630.65171.05551.18580.91091.04361.01010.7821
SGAI 0.8731.05151.05850.89411.27330.94881.14550.97540.93761.1465
LVGI 0.98530.96191.09631.20240.61430.93731.23380.94271.3681.0989
TATA -0.0307-0.0745-0.0875-0.0401-0.0337-0.08940.0161-0.1083-0.0878-0.0721
M-score -2.40-2.76-2.68-2.65-3.11-2.76-2.42-3.14-2.45-2.87

Schweitzer-Mauduit International, Inc. Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.89410.84930.96450.93080.96751.11671.23981.27061.23770.8714
GMI 0.75930.89480.94720.99451.05051.01941.04831.08321.16041.1871
AQI 1.33081.10140.96130.82880.87562.07462.12522.20942.06541.0642
SGI 1.00740.97190.95420.97460.980.99271.00641.01091.04941.0278
DEPI 1.00011.04361.02581.03211.00411.01010.92050.91530.82070.7821
SGAI 0.98740.97540.95490.96621.0190.93761.02051.05061.04831.1465
LVGI 0.9010.94270.95650.88590.85921.3681.46921.47121.63671.0989
TATA -0.0649-0.1083-0.0793-0.0892-0.0761-0.0857-0.0717-0.0722-0.0755-0.0707
M-score -2.83-3.14-2.94-3.01-2.86-2.44-2.28-2.20-2.29-2.86
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