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Schweitzer-Mauduit International Inc (NYSE:SWM)
Beneish M-Score
-2.21 (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 -2.21 signals that the company is a manipulator.

SWM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -2.21
Current: -2.21

-3.28
-2.21

During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International Inc was -2.21. The lowest was -3.28. And the median was -2.71.


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 * 1.4553+0.528 * 0.938+0.404 * 1.6251+0.892 * 0.962+0.115 * 0.9433
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1498+4.679 * -0.0521-0.327 * 1.1687
=-2.21

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $97.3 Mil.
Revenue was 209.8 + 184.4 + 181.9 + 188 = $764.1 Mil.
Gross Profit was 65.8 + 52.4 + 54.8 + 51.4 = $224.4 Mil.
Total Current Assets was $444.8 Mil.
Total Assets was $1,290.0 Mil.
Property, Plant and Equipment(Net PPE) was $308.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.0 Mil.
Selling, General & Admin. Expense(SGA) was $92.8 Mil.
Total Current Liabilities was $143.1 Mil.
Long-Term Debt was $568.2 Mil.
Net Income was 21.7 + 25.8 + 23.4 + 18.8 = $89.7 Mil.
Non Operating Income was 2.7 + 1.3 + 6.1 + 2.1 = $12.2 Mil.
Cash Flow from Operations was 64.5 + 24.5 + 44.5 + 11.2 = $144.7 Mil.
Accounts Receivable was $69.5 Mil.
Revenue was 181.7 + 204.3 + 203.6 + 204.7 = $794.3 Mil.
Gross Profit was 49.1 + 52.9 + 59.2 + 57.6 = $218.8 Mil.
Total Current Assets was $519.4 Mil.
Total Assets was $1,185.0 Mil.
Property, Plant and Equipment(Net PPE) was $362.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.1 Mil.
Selling, General & Admin. Expense(SGA) was $83.9 Mil.
Total Current Liabilities was $123.5 Mil.
Long-Term Debt was $435.6 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)
=(97.3 / 764.1) / (69.5 / 794.3)
=0.12733935 / 0.08749843
=1.4553

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)
=(52.4 / 794.3) / (65.8 / 764.1)
=0.27546267 / 0.29367884
=0.938

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 - (444.8 + 308.1) / 1290) / (1 - (519.4 + 362) / 1185)
=0.41635659 / 0.25620253
=1.6251

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
=764.1 / 794.3
=0.962

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))
=(45.1 / (45.1 + 362)) / (41 / (41 + 308.1))
=0.11078359 / 0.11744486
=0.9433

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)
=(92.8 / 764.1) / (83.9 / 794.3)
=0.12145007 / 0.1056276
=1.1498

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)
=((568.2 + 143.1) / 1290) / ((435.6 + 123.5) / 1185)
=0.55139535 / 0.47181435
=1.1687

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
=(89.7 - 12.2 - 144.7) / 1290
=-0.0521

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 -2.21 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

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 -0.0745-0.0875-0.0401-0.0337-0.08950.0162-0.1083-0.0878-0.0722-0.0521
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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.95191.11671.23981.27061.23770.87140.91090.8981.0011.4553
GMI 1.08361.01941.04831.08321.16041.18711.15661.11161.01430.938
AQI 0.87562.07462.12522.20942.06541.06011.12431.14471.0931.6251
SGI 0.99610.99271.00641.01091.04941.02780.99310.95670.90970.962
DEPI 0.98051.01010.92050.91530.82070.78210.84960.86820.98020.9433
SGAI 1.02860.93761.02051.05061.04831.14651.13031.13811.0781.1498
LVGI 0.85921.3681.46921.47121.63671.09731.06521.00480.99141.1687
TATA -0.0761-0.0857-0.073-0.0735-0.0768-0.0722-0.0742-0.0847-0.0717-0.0521
M-score -2.85-2.44-2.28-2.21-2.30-2.87-2.84-2.93-2.86-2.21
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