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Schweitzer-Mauduit International Inc (NYSE:SWM)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

SWM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -2.21
Current: -2.86

-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 -2.72.


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 * 1.001+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
=-2.86

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

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

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)
=(119.1 / 736) / (130.8 / 809.1)
=0.16182065 / 0.1616611
=1.001

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)
=(54.8 / 809.1) / (52.4 / 736)
=0.28624397 / 0.28220109
=1.0143

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 - (510.9 + 313.4) / 1119.9) / (1 - (562.3 + 369.6) / 1228.6)
=0.26395214 / 0.24149438
=1.093

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
=736 / 809.1
=0.9097

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))
=0.10896818 / 0.11117413
=0.9802

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)
=0.10978261 / 0.10184155
=1.078

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)
=0.46343424 / 0.46744262
=0.9914

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
=(86.5 - 12.5 - 154.3) / 1119.9
=-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 -2.86 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00270.91061.03730.8050.76911.08541.11950.84931.11670.8714
GMI 1.27841.13170.84881.12530.5150.98260.89050.89481.01941.1871
AQI 1.09931.28451.46121.37020.90630.98950.92921.10142.07461.0642
SGI 1.01870.97821.0911.07430.93711.02861.08210.97190.99271.0278
DEPI 0.88440.87171.21630.65171.05551.18580.91091.04361.01010.7821
SGAI 0.8731.05151.05850.89411.27330.94881.14550.97540.93761.1465
LVGI 0.98530.96191.09631.20240.61430.93731.23380.94271.3681.0989
TATA -0.0307-0.0745-0.0875-0.0401-0.0337-0.08940.0161-0.1083-0.0878-0.0721
M-score -2.40-2.76-2.68-2.65-3.11-2.76-2.42-3.14-2.45-2.87

Schweitzer-Mauduit International Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.93080.96751.11671.23981.27061.23770.87140.91090.8981.001
GMI 0.99451.05051.01941.04831.08321.16041.18711.15661.11161.0143
AQI 0.82880.87562.07462.12522.20942.06541.06421.12431.14471.093
SGI 0.97460.980.99271.00641.01091.04941.02780.99310.95670.9097
DEPI 1.03211.00411.01010.92050.91530.82070.78210.84960.86820.9802
SGAI 0.96621.0190.93761.02051.05061.04831.14651.13031.13811.078
LVGI 0.88590.85921.3681.46921.47121.63671.09891.06521.00480.9914
TATA -0.0892-0.0761-0.0857-0.073-0.0735-0.0768-0.0721-0.0742-0.0847-0.0717
M-score -3.01-2.86-2.44-2.28-2.21-2.30-2.87-2.84-2.93-2.86
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