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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 -1.90. The lowest was -3.26. And the median was -2.71.
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 * 0.9948||+||0.528 * 0.9262||+||0.404 * 1.6756||+||0.892 * 1.1563||+||0.115 * 0.8693|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1796||+||4.679 * -0.0554||-||0.327 * 1.0235|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $137.0 Mil.|
Revenue was 209.3 + 217.3 + 214.6 + 209.8 = $851.0 Mil.
Gross Profit was 63.1 + 66.9 + 63.5 + 65.8 = $259.3 Mil.
Total Current Assets was $363.1 Mil.
Total Assets was $1,204.9 Mil.
Property, Plant and Equipment(Net PPE) was $308.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.3 Mil.
Selling, General & Admin. Expense(SGA) was $110.2 Mil.
Total Current Liabilities was $130.4 Mil.
Long-Term Debt was $441.1 Mil.
Net Income was 18.7 + 26 + 21.1 + 21.7 = $87.5 Mil.
Non Operating Income was 0.7 + 1 + 2.3 + 2.7 = $6.7 Mil.
Cash Flow from Operations was 30.8 + 34.6 + 17.6 + 64.5 = $147.5 Mil.
|Accounts Receivable was $119.1 Mil.
Revenue was 184.4 + 181.9 + 188 + 181.7 = $736.0 Mil.
Gross Profit was 52.4 + 54.8 + 51.4 + 49.1 = $207.7 Mil.
Total Current Assets was $510.9 Mil.
Total Assets was $1,119.9 Mil.
Property, Plant and Equipment(Net PPE) was $313.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.2 Mil.
Selling, General & Admin. Expense(SGA) was $80.8 Mil.
Total Current Liabilities was $122.0 Mil.
Long-Term Debt was $397.0 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)|
|=||(137 / 851)||/||(119.1 / 736)|
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)|
|=||(207.7 / 736)||/||(259.3 / 851)|
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 - (363.1 + 308.9) / 1204.9)||/||(1 - (510.9 + 313.4) / 1119.9)|
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))|
|=||(39.2 / (39.2 + 313.4))||/||(45.3 / (45.3 + 308.9))|
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)|
|=||(110.2 / 851)||/||(80.8 / 736)|
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)|
|=||((441.1 + 130.4) / 1204.9)||/||((397 + 122) / 1119.9)|
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|
|=||(87.5 - 6.7||-||147.5)||/||1204.9|
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 -2.42 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