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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 -2.22. The lowest was -3.28. And the median was -2.72.
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 * 1.001||+||0.528 * 1.0143||+||0.404 * 1.093||+||0.892 * 0.9097||+||0.115 * 0.9802|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.078||+||4.679 * -0.0717||-||0.327 * 0.9914|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|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.
Net Income was 25.8 + 23.4 + 18.8 + 18.5 = $86.5 Mil.
Non Operating Income was 1.3 + 6.1 + 2.1 + 3 = $12.5 Mil.
Cash Flow from Operations was 24.5 + 44.5 + 11.2 + 74.1 = $154.3 Mil.
|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.
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)|
|=||(119.1 / 736)||/||(130.8 / 809.1)|
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)|
|=||(54.8 / 809.1)||/||(52.4 / 736)|
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 - (510.9 + 313.4) / 1119.9)||/||(1 - (562.3 + 369.6) / 1228.6)|
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))|
|=||(45.2 / (45.2 + 369.6))||/||(39.2 / (39.2 + 313.4))|
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)|
|=||(80.8 / 736)||/||(82.4 / 809.1)|
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)|
|=||((397 + 122) / 1119.9)||/||((437.9 + 136.4) / 1228.6)|
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|
|=||(86.5 - 12.5||-||154.3)||/||1119.9|
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 -2.86 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