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GuruFocus has detected 2 Warning Signs with Manitowoc Co Inc $MTW.
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Manitowoc Co Inc (NYSE:MTW)
Beneish M-Score
-3.28 (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.

Manitowoc Co Inc has a M-score of -3.28 suggests that the company is not a manipulator.

MTW' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: 1.17
Current: -3.28

-4.25
1.17

During the past 13 years, the highest Beneish M-Score of Manitowoc Co Inc was 1.17. The lowest was -4.25. And the median was -2.51.


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 Manitowoc Co 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 * 0.9411+0.528 * 1.1915+0.404 * 1.1123+0.892 * 0.7907+0.115 * 0.8651
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1204+4.679 * -0.1394-0.327 * 1.0576
=-3.28

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $138 Mil.
Revenue was 305.8 + 378.2 + 349.8 + 457.7 = $1,492 Mil.
Gross Profit was 51.9 + 41.7 + 41.5 + 88.2 = $223 Mil.
Total Current Assets was $736 Mil.
Total Assets was $1,506 Mil.
Property, Plant and Equipment(Net PPE) was $306 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $272 Mil.
Total Current Liabilities was $428 Mil.
Long-Term Debt was $269 Mil.
Net Income was -36 + -23.4 + -140 + -4.9 = $-204 Mil.
Non Operating Income was -0.7 + -0.8 + 0 + 1.7 = $0 Mil.
Cash Flow from Operations was -32.5 + 57.2 + -3 + -16.3 = $5 Mil.
Accounts Receivable was $186 Mil.
Revenue was 427.4 + 543.1 + 438.2 + 477.7 = $1,886 Mil.
Gross Profit was 79.7 + 92 + 69.9 + 94.9 = $337 Mil.
Total Current Assets was $899 Mil.
Total Assets was $1,820 Mil.
Property, Plant and Equipment(Net PPE) was $417 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $307 Mil.
Total Current Liabilities was $527 Mil.
Long-Term Debt was $269 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)
=(138.1 / 1491.5) / (185.6 / 1886.4)
=0.09259135 / 0.09838846
=0.9411

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)
=(336.5 / 1886.4) / (223.3 / 1491.5)
=0.1783821 / 0.14971505
=1.1915

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 - (735.5 + 306.2) / 1505.9) / (1 - (899 + 416.9) / 1820.4)
=0.3082542 / 0.27713689
=1.1123

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
=1491.5 / 1886.4
=0.7907

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))
=(53.9 / (53.9 + 416.9)) / (46.7 / (46.7 + 306.2))
=0.11448598 / 0.13233211
=0.8651

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)
=(271.6 / 1491.5) / (306.6 / 1886.4)
=0.18209856 / 0.16253181
=1.1204

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)
=((268.6 + 427.7) / 1505.9) / ((269.3 + 526.6) / 1820.4)
=0.4623813 / 0.4372116
=1.0576

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
=(-204.3 - 0.2 - 5.4) / 1505.9
=-0.1394

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.

Manitowoc Co Inc has a M-score of -3.28 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 local exchange's currency.

Manitowoc Co Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.05131.19410.6031.00671.00081.02990.74691.56290.8460.9984
GMI 0.98611.03661.02380.90281.05180.9630.95471.24541.13821.1339
AQI 0.94291.82711.05611.02460.96980.97750.99460.99541.10850.5109
SGI 1.38981.22230.80390.85961.15361.09031.03440.56950.80930.8646
DEPI 0.97721.40030.67970.91621.0421.06131.06831.93170.68190.849
SGAI 0.87010.97161.44821.11750.95560.9770.99910.99581.11811.0245
LVGI 0.83251.49381.10210.9970.9810.9790.93220.97260.96640.7229
TATA 0.14290.0148-0.239-0.05210.0024-0.0114-0.04290.0256-0.0091-0.0845
M-score -1.37-1.79-4.25-2.91-2.30-2.44-2.88-1.98-2.76-3.06

Manitowoc Co Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.56291.70352.37544.33970.8460.77490.53730.22410.99840.9411
GMI 1.24541.50482.4125-5.98071.13820.95410.6014-0.251.14391.1915
AQI 0.99541.02631.03771.02851.10850.5290.54610.59880.51091.1123
SGI 0.56950.46510.33340.1970.80931.01321.40672.28330.86460.7907
DEPI 1.93172.19943.29436.71990.68190.57520.37750.1530.8490.8651
SGAI 0.99580.93850.88590.89421.11811.11421.1511.16651.02451.1204
LVGI 0.97260.99250.98661.0040.96640.65650.6520.69170.72291.0576
TATA 0.0256-0.0163-0.0194-0.0227-0.0091-0.0387-0.0152-0.1037-0.0769-0.1394
M-score -1.98-1.96-0.85-3.23-2.76-3.03-2.99-3.38-3.01-3.28
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