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Ark Restaurants Corp (NAS:ARKR)
Beneish M-Score
-3.75 (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.

Ark Restaurants Corp has a M-score of -3.49 suggests that the company is not a manipulator.

ARKR' s 10-Year Beneish M-Score Range
Min: -4.13   Max: 0.27
Current: -3.75

-4.13
0.27

During the past 13 years, the highest Beneish M-Score of Ark Restaurants Corp was 0.27. The lowest was -4.13. And the median was -2.74.


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 Ark Restaurants Corp 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 * 0.7834+0.528 * 0.0202+0.404 * 1.0173+0.892 * 1.0226+0.115 * 1.0743
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -1.636+4.679 * -0.151-0.327 * 1.229
=-3.49

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2.5 Mil.
Revenue was 39.11 + 31.037 + 32.138 + 33.699 = $136.0 Mil.
Gross Profit was 7.071 + 3.629 + 15.676 + 5.571 = $31.9 Mil.
Total Current Assets was $12.8 Mil.
Total Assets was $62.8 Mil.
Property, Plant and Equipment(Net PPE) was $29.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.5 Mil.
Selling, General & Admin. Expense(SGA) was $20.5 Mil.
Total Current Liabilities was $15.6 Mil.
Long-Term Debt was $5.8 Mil.
Net Income was 2.239 + -0.174 + 0.563 + 1.453 = $4.1 Mil.
Non Operating Income was 0.121 + 0.115 + 0.066 + 0.298 = $0.6 Mil.
Cash Flow from Operations was 4.359 + 1.386 + 2.059 + 5.165 = $13.0 Mil.
Accounts Receivable was $3.2 Mil.
Revenue was 36.473 + 29.09 + 31.336 + 36.082 = $133.0 Mil.
Gross Profit was 7.867 + 3.395 + 14.713 + -25.343 = $0.6 Mil.
Total Current Assets was $10.6 Mil.
Total Assets was $53.9 Mil.
Property, Plant and Equipment(Net PPE) was $25.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.3 Mil.
Selling, General & Admin. Expense(SGA) was $-12.3 Mil.
Total Current Liabilities was $12.8 Mil.
Long-Term Debt was $2.1 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)
=(2.526 / 135.984) / (3.153 / 132.981)
=0.01857571 / 0.02371015
=0.7834

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)
=(3.629 / 132.981) / (7.071 / 135.984)
=0.00475256 / 0.23493205
=0.0202

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 - (12.836 + 29.347) / 62.842) / (1 - (10.627 + 25.836) / 53.873)
=0.32874511 / 0.32316745
=1.0173

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
=135.984 / 132.981
=1.0226

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))
=(4.313 / (4.313 + 25.836)) / (4.508 / (4.508 + 29.347))
=0.14305615 / 0.13315611
=1.0743

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)
=(20.497 / 135.984) / (-12.252 / 132.981)
=0.15073097 / -0.09213346
=-1.636

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)
=((5.793 + 15.586) / 62.842) / ((2.109 + 12.804) / 53.873)
=0.34020241 / 0.2768177
=1.229

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
=(4.081 - 0.6 - 12.969) / 62.842
=-0.151

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.

Ark Restaurants Corp has a M-score of -3.49 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.

Ark Restaurants Corp Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.16651.32161.25880.94860.86810.85431.04750.97931.27890.7959
GMI 1.01481.17530.85141.0044.22171.27910.98260.9920.81191.09
AQI 0.91691.04270.95020.96680.92361.03041.13661.12190.85391.2762
SGI 1.09280.95361.06061.01881.0840.91721.0241.16241.00830.9462
DEPI 0.9510.99680.98421.13221.08070.87680.91130.85451.19410.9241
SGAI 0.95710.83221.26820.96370.11261.06411.05190.85670.98051.1047
LVGI 0.55980.89051.13821.13390.68231.33511.14930.84711.06881.1747
TATA -0.1129-0.1231-0.1617-0.0325-0.0937-0.0941-0.0645-0.1401-0.1521-0.1726
M-score -2.65-2.63-3.14-2.70-1.03-3.10-2.74-2.91-3.08-3.45

Ark Restaurants Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.03620.85191.28650.69940.6020.71180.79590.95151.19870.7834
GMI 0.88390.51496.79141.6671.716152.17650.08370.36120.36960.0202
AQI 1.16531.0340.85390.9531.18381.31041.27621.17250.94581.0173
SGI 1.0731.04741.00230.98890.97990.95720.94620.96260.98271.0226
DEPI 0.92810.91081.19411.02150.94110.98710.92410.99011.11291.0743
SGAI 0.9772.1774-1.2307-0.1251-0.0745-0.6-1.8661-17.7218-29.2187-1.636
LVGI 1.26581.09471.06880.92011.10371.08671.17471.14971.18821.229
TATA -0.1639-0.1632-0.1521-0.2047-0.1943-0.1786-0.1726-0.1772-0.1437-0.151
M-score -3.23-3.820.46-3.17-3.1823.77-3.47-0.481.81-3.49
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