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Ark Restaurants Corp (NAS:ARKR)
Beneish M-Score
-3.03 (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 -3.03 suggests that the company is not a manipulator.

ARKR' s 10-Year Beneish M-Score Range
Min: -9.99   Max: 7.28
Current: -3.03

-9.99
7.28

During the past 13 years, the highest Beneish M-Score of Ark Restaurants Corp was 7.28. The lowest was -9.99. 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 * 1.1987+0.528 * 1.0273+0.404 * 0.9458+0.892 * 0.9827+0.115 * 1.1129
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9113+4.679 * -0.1437-0.327 * 1.1882
=-3.03

* 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 $3.3 Mil.
Revenue was 31.037 + 32.138 + 33.699 + 36.473 = $133.3 Mil.
Gross Profit was 3.629 + 15.676 + -26.196 + 18.672 = $11.8 Mil.
Total Current Assets was $12.8 Mil.
Total Assets was $61.2 Mil.
Property, Plant and Equipment(Net PPE) was $29.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.5 Mil.
Selling, General & Admin. Expense(SGA) was $-0.6 Mil.
Total Current Liabilities was $16.1 Mil.
Long-Term Debt was $6.3 Mil.
Net Income was -0.174 + 0.563 + 1.453 + 2.629 = $4.5 Mil.
Non Operating Income was 0.115 + 0.066 + 0.298 + 0.038 = $0.5 Mil.
Cash Flow from Operations was 1.386 + 2.059 + 5.165 + 4.13 = $12.7 Mil.
Accounts Receivable was $2.8 Mil.
Revenue was 29.09 + 31.336 + 36.082 + 39.193 = $135.7 Mil.
Gross Profit was 3.395 + 14.713 + -25.343 + 19.551 = $12.3 Mil.
Total Current Assets was $10.7 Mil.
Total Assets was $53.4 Mil.
Property, Plant and Equipment(Net PPE) was $25.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.3 Mil.
Selling, General & Admin. Expense(SGA) was $-0.7 Mil.
Total Current Liabilities was $13.8 Mil.
Long-Term Debt was $2.6 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)
=(3.323 / 133.347) / (2.821 / 135.701)
=0.02491995 / 0.02078835
=1.1987

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)
=(15.676 / 135.701) / (3.629 / 133.347)
=0.09075836 / 0.08834844
=1.0273

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 - (12.762 + 29.244) / 61.152) / (1 - (10.67 + 25.061) / 53.412)
=0.3130887 / 0.33103048
=0.9458

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
=133.347 / 135.701
=0.9827

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))
=(4.327 / (4.327 + 25.061)) / (4.459 / (4.459 + 29.244))
=0.14723697 / 0.13230276
=1.1129

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)
=(-0.634 / 133.347) / (-0.708 / 135.701)
=-0.00475451 / -0.00521735
=0.9113

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)
=((6.332 + 16.06) / 61.152) / ((2.625 + 13.835) / 53.412)
=0.36616954 / 0.30817045
=1.1882

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
=(4.471 - 0.517 - 12.74) / 61.152
=-0.1437

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 -3.03 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.02341.03620.85191.28650.69940.6020.71180.79590.95151.1987
GMI 0.95660.88390.51496.79141.6671.71612.88320.24951.01691.0273
AQI 1.25011.16531.0340.85390.9531.18381.31041.27621.17250.9458
SGI 1.10661.0731.04741.00230.98890.97990.95720.94620.96260.9827
DEPI 0.85550.92810.91081.19411.02150.94110.98710.92410.99011.1129
SGAI 0.93130.9772.1774-1.2307-0.1251-0.0745-0.07090.02940.21560.9113
LVGI 1.27181.26581.09471.06880.92011.10371.08671.17471.14971.1882
TATA -0.1437-0.1639-0.1632-0.1521-0.2047-0.1943-0.1786-0.1726-0.1772-0.1437
M-score -3.05-3.23-3.820.46-3.17-3.18-2.34-3.71-3.22-3.03
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