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Schweitzer-Mauduit International, Inc. (NYSE:SWM)
Beneish M-Score
-2.12 (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 -2.12 signals that the company is a manipulator.

SWM' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -2.12
Current: -2.12

-3.28
-2.12

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.


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 * 1.3657+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
=-2.12

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

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

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)
=(138.8 / 790.1) / (100.1 / 778.2)
=0.17567397 / 0.12863017
=1.3657

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)
=(57.6 / 778.2) / (59.2 / 790.1)
=0.3233102 / 0.30616378
=1.056

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 - (575.2 + 389.7) / 1263.9) / (1 - (446.1 + 374.5) / 919)
=0.23656935 / 0.10707291
=2.2094

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
=790.1 / 778.2
=1.0153

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))
=0.09101942 / 0.09895954
=0.9198

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)
=0.09973421 / 0.09406322
=1.0603

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)
=0.45929267 / 0.31218716
=1.4712

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
=(67.6 - 5.2 - 153.7) / 1263.9
=-0.0722

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.


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.91661.00270.91061.03730.8051.30180.91421.04680.85771.256
GMI 1.03441.27841.13170.84881.12530.54910.92140.90140.92550.9736
AQI 1.2921.09931.28451.46121.37020.90630.98950.92921.10142.0618
SGI 1.15981.01870.97821.0911.07430.96420.99971.10270.96560.9806
DEPI 0.88980.88440.87171.21630.65171.05551.18580.90141.03261.0316
SGAI 1.01730.8731.05151.05850.89411.29690.93161.14370.97640.9381
LVGI 0.97190.98530.96191.09631.20240.61430.93731.23380.94271.3645
TATA -0.0312-0.0307-0.0745-0.0875-0.0401-0.0338-0.08940.0162-0.1087-0.088
M-score -2.43-2.40-2.76-2.68-2.65-2.59-2.97-2.46-3.12-2.36

Schweitzer-Mauduit International, Inc. Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.86650.77410.78060.85770.98771.00081.0681.2561.32121.3657
GMI 0.84740.83360.7980.92550.96360.98771.00730.97361.00971.056
AQI 1.09571.11791.33081.10140.96130.82880.87562.06182.12522.2094
SGI 1.14991.10441.05140.96560.93180.93740.92750.98061.00321.0153
DEPI 0.8660.83960.9641.03261.0331.05431.04681.03160.93180.9198
SGAI 1.10061.04550.98520.97640.95090.95121.02290.93811.02381.0603
LVGI 1.09761.01620.9010.94270.95650.88590.85921.36451.46921.4712
TATA -0.0418-0.0545-0.0601-0.1076-0.0793-0.0919-0.0798-0.0858-0.0717-0.0722
M-score -2.77-2.92-2.86-3.12-2.93-2.99-2.85-2.35-2.22-2.12
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