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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.
Schweitzer-Mauduit International, Inc. has a M-score of -2.12 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International, Inc. was -2.12. The lowest was -3.28. And the median was -2.67.
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 * 1.3657||+||0.528 * 1.056||+||0.404 * 2.2094||+||0.892 * 1.0153||+||0.115 * 0.9198|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0603||+||4.679 * -0.0722||-||0.327 * 1.4712|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $138.8 Mil.|
Revenue was 203.6 + 204.7 + 196.5 + 185.3 = $790.1 Mil.
Gross Profit was 59.2 + 57.6 + 61.9 + 63.2 = $241.9 Mil.
Total Current Assets was $575.2 Mil.
Total Assets was $1,263.9 Mil.
Property, Plant and Equipment(Net PPE) was $389.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.8 Mil.
Selling, General & Admin. Expense(SGA) was $78.8 Mil.
Total Current Liabilities was $135.6 Mil.
Long-Term Debt was $444.9 Mil.
Net Income was 25 + 23.2 + -9.7 + 29.1 = $67.6 Mil.
Non Operating Income was 2.8 + -0.8 + 2.7 + 0.5 = $5.2 Mil.
Cash Flow from Operations was 39.1 + 18.3 + 55 + 41.3 = $153.7 Mil.
|Accounts Receivable was $100.1 Mil.
Revenue was 196.5 + 194.5 + 185.2 + 202 = $778.2 Mil.
Gross Profit was 64.9 + 62.7 + 60.2 + 63.8 = $251.6 Mil.
Total Current Assets was $446.1 Mil.
Total Assets was $919.0 Mil.
Property, Plant and Equipment(Net PPE) was $374.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.5 Mil.
Selling, General & Admin. Expense(SGA) was $73.2 Mil.
Total Current Liabilities was $125.7 Mil.
Long-Term Debt was $161.2 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)|
|=||(138.8 / 790.1)||/||(100.1 / 778.2)|
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)|
|=||(57.6 / 778.2)||/||(59.2 / 790.1)|
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 - (575.2 + 389.7) / 1263.9)||/||(1 - (446.1 + 374.5) / 919)|
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))|
|=||(37.5 / (37.5 + 374.5))||/||(42.8 / (42.8 + 389.7))|
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)|
|=||(78.8 / 790.1)||/||(73.2 / 778.2)|
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)|
|=||((444.9 + 135.6) / 1263.9)||/||((161.2 + 125.7) / 919)|
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|
|=||(67.6 - 5.2||-||153.7)||/||1263.9|
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 -2.12 signals that the company is likely to 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