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Schweitzer-Mauduit International, Inc. (NYSE:SWM)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

SWM' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -2.2
Current: -2.2

-3.28
-2.2

During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International, Inc. was -2.20. The lowest was -3.28. And the median was -2.68.


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 * 1.317+0.528 * 1.0483+0.404 * 2.1252+0.892 * 1.0064+0.115 * 0.9205
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0205+4.679 * -0.0717-0.327 * 1.4692
=-2.20

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $134.8 Mil.
Revenue was 204.7 + 196.5 + 185.3 + 196.5 = $783.0 Mil.
Gross Profit was 57.6 + 61.9 + 63.2 + 64.9 = $247.6 Mil.
Total Current Assets was $560.0 Mil.
Total Assets was $1,247.7 Mil.
Property, Plant and Equipment(Net PPE) was $391.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.9 Mil.
Selling, General & Admin. Expense(SGA) was $75.9 Mil.
Total Current Liabilities was $143.1 Mil.
Long-Term Debt was $439.4 Mil.
Net Income was 23.2 + -9.7 + 29.1 + 26.6 = $69.2 Mil.
Non Operating Income was -0.8 + 2.7 + 0.5 + 1.2 = $3.6 Mil.
Cash Flow from Operations was 18.3 + 55 + 41.3 + 40.5 = $155.1 Mil.
Accounts Receivable was $101.7 Mil.
Revenue was 194.5 + 194.7 + 195.9 + 192.9 = $778.0 Mil.
Gross Profit was 62.7 + 65.3 + 66.3 + 63.6 = $257.9 Mil.
Total Current Assets was $423.0 Mil.
Total Assets was $905.1 Mil.
Property, Plant and Equipment(Net PPE) was $381.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.2 Mil.
Selling, General & Admin. Expense(SGA) was $73.9 Mil.
Total Current Liabilities was $130.3 Mil.
Long-Term Debt was $157.3 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)
=(134.8 / 783) / (101.7 / 778)
=0.17215837 / 0.13071979
=1.317

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)
=(61.9 / 778) / (57.6 / 783)
=0.331491 / 0.31621967
=1.0483

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 - (560 + 391.8) / 1247.7) / (1 - (423 + 381.1) / 905.1)
=0.23715637 / 0.11158988
=2.1252

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
=783 / 778
=1.0064

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))
=(37.2 / (37.2 + 381.1)) / (41.9 / (41.9 + 391.8))
=0.08893139 / 0.09661056
=0.9205

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)
=(75.9 / 783) / (73.9 / 778)
=0.09693487 / 0.09498715
=1.0205

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)
=((439.4 + 143.1) / 1247.7) / ((157.3 + 130.3) / 905.1)
=0.46685902 / 0.31775494
=1.4692

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
=(69.2 - 3.6 - 155.1) / 1247.7
=-0.0717

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 -2.20 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 0.91661.00270.91061.03730.8051.33940.88851.06670.85211.2407
GMI 1.03441.27841.13170.84881.12530.5150.98260.89050.89481.0194
AQI 1.2921.09931.28451.46121.37020.90630.98950.92921.10142.0618
SGI 1.15981.01870.97821.0911.07430.93711.02861.08210.97190.9927
DEPI 0.88980.88440.87171.21630.65171.05551.18580.91091.04361.0101
SGAI 1.01730.8731.05151.05850.89411.27330.94881.14550.97540.9376
LVGI 0.97190.98530.96191.09631.20240.61430.93731.23380.94271.3645
TATA -0.0312-0.0307-0.0745-0.0875-0.0401-0.0337-0.08940.0161-0.1083-0.088
M-score -2.43-2.40-2.76-2.68-2.65-2.59-2.94-2.47-3.13-2.34

Schweitzer-Mauduit International, Inc. Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.06670.88980.80130.81470.85210.96450.96261.01081.24071.317
GMI 0.89050.83240.80710.75930.89480.94720.99451.05051.01941.0483
AQI 0.92921.09571.11791.33081.10140.96130.82880.87562.06182.1252
SGI 1.08211.11981.06691.00740.97190.95420.97460.980.99271.0064
DEPI 0.91090.88280.86191.00011.04361.02581.03211.00411.01010.9205
SGAI 1.14551.09741.03880.98740.97540.95490.96621.0190.93761.0205
LVGI 1.23381.09761.01620.9010.94270.95650.88590.85921.36451.4692
TATA 0.0166-0.0426-0.0583-0.0649-0.1083-0.0793-0.0892-0.0761-0.0858-0.0717
M-score -2.47-2.79-2.96-2.91-3.13-2.94-2.98-2.82-2.33-2.20
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