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Schweitzer-Mauduit International Inc (NYSE:SWM)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

SWM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.26   Max: -2.21
Current: -2.38

-3.26
-2.21

During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International Inc was -2.21. The lowest was -3.26. And the median was -2.72.


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 * 1.0857+0.528 * 0.9153+0.404 * 1.5774+0.892 * 1.0929+0.115 * 0.9168
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0579+4.679 * -0.0433-0.327 * 1.0857
=-2.38

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $126.6 Mil.
Revenue was 217.3 + 214.6 + 209.8 + 184.4 = $826.1 Mil.
Gross Profit was 66.9 + 63.5 + 65.8 + 52.4 = $248.6 Mil.
Total Current Assets was $405.2 Mil.
Total Assets was $1,243.5 Mil.
Property, Plant and Equipment(Net PPE) was $307.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.6 Mil.
Selling, General & Admin. Expense(SGA) was $99.2 Mil.
Total Current Liabilities was $116.3 Mil.
Long-Term Debt was $506.8 Mil.
Net Income was 26 + 21.1 + 21.7 + 25.8 = $94.6 Mil.
Non Operating Income was 1 + 2.3 + 2.7 + 1.3 = $7.3 Mil.
Cash Flow from Operations was 34.6 + 17.6 + 64.5 + 24.5 = $141.2 Mil.
Accounts Receivable was $106.7 Mil.
Revenue was 181.9 + 188 + 181.7 + 204.3 = $755.9 Mil.
Gross Profit was 54.8 + 51.4 + 49.1 + 52.9 = $208.2 Mil.
Total Current Assets was $494.2 Mil.
Total Assets was $1,114.8 Mil.
Property, Plant and Equipment(Net PPE) was $318.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.0 Mil.
Selling, General & Admin. Expense(SGA) was $85.8 Mil.
Total Current Liabilities was $119.6 Mil.
Long-Term Debt was $394.9 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)
=(126.6 / 826.1) / (106.7 / 755.9)
=0.15325021 / 0.14115624
=1.0857

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)
=(208.2 / 755.9) / (248.6 / 826.1)
=0.27543326 / 0.30093209
=0.9153

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 - (405.2 + 307.1) / 1243.5) / (1 - (494.2 + 318.7) / 1114.8)
=0.42718134 / 0.27081091
=1.5774

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
=826.1 / 755.9
=1.0929

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))
=(41 / (41 + 318.7)) / (43.6 / (43.6 + 307.1))
=0.11398388 / 0.12432278
=0.9168

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)
=(99.2 / 826.1) / (85.8 / 755.9)
=0.12008231 / 0.11350708
=1.0579

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)
=((506.8 + 116.3) / 1243.5) / ((394.9 + 119.6) / 1114.8)
=0.50108565 / 0.46151776
=1.0857

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
=(94.6 - 7.3 - 141.2) / 1243.5
=-0.0433

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 -2.38 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.91061.03730.8050.76911.10461.11770.83591.11670.87141.4553
GMI 1.13170.84881.12530.5150.97240.87070.92481.01941.18710.938
AQI 1.28451.46121.37020.90630.98950.92921.10142.07461.06011.6251
SGI 0.97821.0911.07430.93711.01071.08390.98760.99271.02780.962
DEPI 0.87171.21630.65171.05551.19680.9221.02151.01010.78210.9433
SGAI 1.05151.05850.89411.27330.95381.13070.9830.93761.14651.1498
LVGI 0.96191.09631.20240.61430.93731.23380.94271.3681.09731.1687
TATA -0.0747-0.0875-0.0401-0.0337-0.08950.0162-0.1083-0.0878-0.0722-0.0521
M-score -2.76-2.68-2.65-3.11-2.76-2.43-3.12-2.45-2.87-2.21

Schweitzer-Mauduit International Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.23981.27061.23770.87140.91090.8981.0011.45531.1771.0857
GMI 1.04831.08321.16041.18711.15661.11161.01430.9380.91410.9153
AQI 2.12522.20942.06541.06011.12431.14471.0931.62511.52331.5774
SGI 1.00641.01091.04941.02780.99310.95670.90970.9621.01681.0929
DEPI 0.92050.91530.82070.78210.84960.86820.98020.94330.95840.9168
SGAI 1.02051.05061.04831.14651.13031.13811.0781.14981.11961.0579
LVGI 1.46921.47121.63671.09731.06521.00480.99141.16871.08151.0857
TATA -0.073-0.0735-0.0768-0.0722-0.0742-0.0847-0.0717-0.0521-0.0538-0.0433
M-score -2.28-2.21-2.30-2.87-2.84-2.93-2.86-2.21-2.44-2.38
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