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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 Schweitzer-Mauduit International, Inc. was -2.20. The lowest was -3.28. And the median was -2.70.
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 * 1.2377||+||0.528 * 1.1604||+||0.404 * 2.0654||+||0.892 * 1.0494||+||0.115 * 0.8207|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0483||+||4.679 * -0.0755||-||0.327 * 1.6367|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $130.8 Mil.|
Revenue was 204.3 + 203.6 + 204.7 + 196.5 = $809.1 Mil.
Gross Profit was 52.9 + 59.2 + 57.6 + 61.9 = $231.6 Mil.
Total Current Assets was $562.3 Mil.
Total Assets was $1,228.6 Mil.
Property, Plant and Equipment(Net PPE) was $369.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.2 Mil.
Selling, General & Admin. Expense(SGA) was $82.4 Mil.
Total Current Liabilities was $136.4 Mil.
Long-Term Debt was $437.9 Mil.
Net Income was 23 + 25 + 23.2 + -9.7 = $61.5 Mil.
Non Operating Income was 2.7 + 2.8 + -0.8 + 2.7 = $7.4 Mil.
Cash Flow from Operations was 34.4 + 39.1 + 18.3 + 55 = $146.8 Mil.
|Accounts Receivable was $100.7 Mil.
Revenue was 185.3 + 196.5 + 194.5 + 194.7 = $771.0 Mil.
Gross Profit was 63.2 + 64.9 + 62.7 + 65.3 = $256.1 Mil.
Total Current Assets was $456.1 Mil.
Total Assets was $940.8 Mil.
Property, Plant and Equipment(Net PPE) was $374.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.8 Mil.
Selling, General & Admin. Expense(SGA) was $74.9 Mil.
Total Current Liabilities was $122.1 Mil.
Long-Term Debt was $146.6 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)|
|=||(130.8 / 809.1)||/||(100.7 / 771)|
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)|
|=||(59.2 / 771)||/||(52.9 / 809.1)|
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 - (562.3 + 369.6) / 1228.6)||/||(1 - (456.1 + 374.7) / 940.8)|
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))|
|=||(36.8 / (36.8 + 374.7))||/||(45.2 / (45.2 + 369.6))|
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)|
|=||(82.4 / 809.1)||/||(74.9 / 771)|
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)|
|=||((437.9 + 136.4) / 1228.6)||/||((146.6 + 122.1) / 940.8)|
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|
|=||(61.5 - 7.4||-||146.8)||/||1228.6|
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 -2.29 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
Schweitzer-Mauduit International, Inc. Annual Data
Schweitzer-Mauduit International, Inc. Quarterly Data