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Ark Restaurants Corp (NAS:ARKR)
Beneish M-Score
-1.51 (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 -1.51 signals that the company is a manipulator.

ARKR' s 10-Year Beneish M-Score Range
Min: -10.15   Max: 7.2
Current: -1.51

-10.15
7.2

During the past 13 years, the highest Beneish M-Score of Ark Restaurants Corp was 7.20. The lowest was -10.15. And the median was -2.70.


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 * 1.7789+0.528 * 1.8972+0.404 * 0.9732+0.892 * 1.0468+0.115 * 0.9634
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.3308+4.679 * -0.0828-0.327 * 0.9133
=-1.51

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $3.7 Mil.
Revenue was 40.375 + 31.548 + 33.359 + 37.071 = $142.4 Mil.
Gross Profit was 8.574 + 2.895 + 5.324 + 6.75 = $23.5 Mil.
Total Current Assets was $15.3 Mil.
Total Assets was $64.2 Mil.
Property, Plant and Equipment(Net PPE) was $28.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.5 Mil.
Selling, General & Admin. Expense(SGA) was $10.8 Mil.
Total Current Liabilities was $15.6 Mil.
Long-Term Debt was $4.3 Mil.
Net Income was 3.241 + -0.583 + 0.722 + 2.288 = $5.7 Mil.
Non Operating Income was 0.042 + 0.064 + 0.057 + 0.186 = $0.3 Mil.
Cash Flow from Operations was 5.045 + -0.278 + 1.766 + 4.101 = $10.6 Mil.
Accounts Receivable was $2.0 Mil.
Revenue was 39.11 + 31.037 + 32.138 + 33.699 = $136.0 Mil.
Gross Profit was 7.071 + 3.629 + 15.676 + 16.292 = $42.7 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 $31.2 Mil.
Total Current Liabilities was $15.6 Mil.
Long-Term Debt was $5.8 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)
=(3.691 / 142.353) / (1.982 / 135.984)
=0.0259285 / 0.01457524
=1.7789

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)
=(2.895 / 135.984) / (8.574 / 142.353)
=0.31377221 / 0.16538464
=1.8972

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 - (15.33 + 28.325) / 64.191) / (1 - (12.836 + 29.347) / 62.842)
=0.31992024 / 0.32874511
=0.9732

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
=142.353 / 135.984
=1.0468

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))
=(4.508 / (4.508 + 29.347)) / (4.543 / (4.543 + 28.325))
=0.13315611 / 0.13821954
=0.9634

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)
=(10.812 / 142.353) / (31.218 / 135.984)
=0.07595203 / 0.22957113
=0.3308

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)
=((4.311 + 15.634) / 64.191) / ((5.793 + 15.586) / 62.842)
=0.31071334 / 0.34020241
=0.9133

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
=(5.668 - 0.349 - 10.634) / 64.191
=-0.0828

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 -1.51 signals that the company is likely to 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.14481.02921.00810.99370.77370.98471.51671.0410.75631.0422
GMI 1.17530.85141.0044.22171.27910.98261.05050.76670.35712.977
AQI 1.04270.95020.96680.92361.03041.13661.12190.85391.27621.1137
SGI 0.95361.06061.01881.0840.91721.0241.18410.98980.94621.0671
DEPI 0.99680.98421.13221.08070.87680.91130.85451.19410.92411.0688
SGAI 0.83221.26820.96370.11261.06411.05190.8410.99885.89820.1865
LVGI 0.89051.13821.13390.68231.33510.85551.44810.841.17471.1646
TATA -0.1231-0.1617-0.0325-0.0937-0.0941-0.0645-0.1428-0.1521-0.1726-0.1144
M-score -2.79-3.35-2.64-0.91-3.18-2.70-2.57-3.27-4.70-1.73

Ark Restaurants Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.57420.68290.75910.81051.09540.69331.04220.99090.96241.7789
GMI 0.89960.62880.52910.40140.41020.80561.36022.53842.60521.8972
AQI 1.18381.31041.27621.17250.94581.01731.11371.04631.07350.9732
SGI 0.97090.95540.94270.96160.98161.01991.06711.06981.05811.0468
DEPI 0.89210.91280.92410.99011.11291.07431.06881.07340.94780.9634
SGAI 1.00922.22453.54634.88214.4871.49560.62480.23350.23960.3308
LVGI 1.10371.08671.17471.14971.18821.2291.16461.17750.89150.9133
TATA -0.1914-0.1721-0.1726-0.1772-0.1437-0.151-0.1144-0.1104-0.0923-0.0828
M-score -3.82-3.94-4.20-4.48-4.06-3.70-2.66-2.03-1.86-1.51
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