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Schweitzer-Mauduit International, Inc. (NYSE:SWM)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

SWM' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -2.34
Current: -2.34

-3.28
-2.34

During the past 13 years, the highest Beneish M-Score of Schweitzer-Mauduit International, Inc. was -2.34. 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 * 1.2407+0.528 * 1.0194+0.404 * 2.0618+0.892 * 0.9927+0.115 * 1.0101
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9376+4.679 * -0.088-0.327 * 1.3645
=-2.34

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $117.5 Mil.
Revenue was 196.5 + 185.3 + 196.5 + 194.5 = $772.8 Mil.
Gross Profit was 61.9 + 63.2 + 64.9 + 62.7 = $252.7 Mil.
Total Current Assets was $537.1 Mil.
Total Assets was $1,224.4 Mil.
Property, Plant and Equipment(Net PPE) was $393.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.3 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $143.9 Mil.
Long-Term Debt was $381.2 Mil.
Net Income was -9.7 + 29.1 + 26.6 + 30.1 = $76.1 Mil.
Non Operating Income was 2.7 + 0.5 + 1.2 + 1.3 = $5.7 Mil.
Cash Flow from Operations was 55 + 41.3 + 40.5 + 41.3 = $178.1 Mil.
Accounts Receivable was $95.4 Mil.
Revenue was 194.7 + 195.9 + 192.9 + 195 = $778.5 Mil.
Gross Profit was 65.3 + 66.3 + 63.6 + 64.3 = $259.5 Mil.
Total Current Assets was $382.0 Mil.
Total Assets was $886.7 Mil.
Property, Plant and Equipment(Net PPE) was $401.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.5 Mil.
Selling, General & Admin. Expense(SGA) was $76.5 Mil.
Total Current Liabilities was $126.9 Mil.
Long-Term Debt was $151.8 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)
=(117.5 / 772.8) / (95.4 / 778.5)
=0.15204451 / 0.12254335
=1.2407

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)
=(63.2 / 778.5) / (61.9 / 772.8)
=0.33333333 / 0.32699275
=1.0194

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 - (537.1 + 393.2) / 1224.4) / (1 - (382 + 401.4) / 886.7)
=0.24019928 / 0.11649938
=2.0618

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
=772.8 / 778.5
=0.9927

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))
=(38.5 / (38.5 + 401.4)) / (37.3 / (37.3 + 393.2))
=0.08751989 / 0.08664344
=1.0101

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)
=(71.2 / 772.8) / (76.5 / 778.5)
=0.09213251 / 0.0982659
=0.9376

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)
=((381.2 + 143.9) / 1224.4) / ((151.8 + 126.9) / 886.7)
=0.42886312 / 0.31431149
=1.3645

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
=(76.1 - 5.7 - 178.1) / 1224.4
=-0.088

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 -2.34 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

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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.21081.06670.88980.80130.81470.85210.96450.96261.01081.2407
GMI 0.97890.89050.83240.80710.75930.89480.94720.99451.05051.0194
AQI 0.81580.92921.09571.11791.33081.10140.96130.82880.87562.0618
SGI 1.04781.08211.11981.06691.00740.97190.95420.97460.980.9927
DEPI 1.0130.91090.88280.86191.00011.04361.02581.03211.00411.0101
SGAI 1.06451.14551.09741.03880.98740.97540.95490.96621.0190.9376
LVGI 1.43761.23381.09761.01620.9010.94270.95650.88590.85921.3645
TATA -0.01720.0166-0.0426-0.0583-0.0649-0.1083-0.0822-0.0921-0.0789-0.088
M-score -2.56-2.47-2.79-2.96-2.91-3.13-2.96-2.99-2.84-2.34
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