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AutoZone Inc (NYSE:AZO)
Beneish M-Score
-2.27 (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.

AutoZone Inc has a M-score of -2.27 suggests that the company is not a manipulator.

AZO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.33   Max: 0.98
Current: -2.27

-3.33
0.98

During the past 13 years, the highest Beneish M-Score of AutoZone Inc was 0.98. The lowest was -3.33. And the median was -2.52.


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 AutoZone 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 * 1.4131+0.528 * 0.9935+0.404 * 0.8812+0.892 * 1.0645+0.115 * 0.9573
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0093+4.679 * -0.0373-0.327 * 0.9923
=-2.27

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $296 Mil.
Revenue was 2257.192 + 2386.043 + 3290.404 + 2493.021 = $10,427 Mil.
Gross Profit was 1190.596 + 1252.934 + 1727.548 + 1302.789 = $5,474 Mil.
Total Current Assets was $4,210 Mil.
Total Assets was $8,366 Mil.
Property, Plant and Equipment(Net PPE) was $3,545 Mil.
Depreciation, Depletion and Amortization(DDA) was $284 Mil.
Selling, General & Admin. Expense(SGA) was $3,470 Mil.
Total Current Liabilities was $4,995 Mil.
Long-Term Debt was $4,388 Mil.
Net Income was 228.613 + 258.112 + 401.137 + 309.071 = $1,197 Mil.
Non Operating Income was 0 + -70.02 + 0 + 0 = $-70 Mil.
Cash Flow from Operations was 207.051 + 323.502 + 526.011 + 522.574 = $1,579 Mil.
Accounts Receivable was $197 Mil.
Revenue was 2143.651 + 2260.264 + 3049.696 + 2341.545 = $9,795 Mil.
Gross Profit was 1120.033 + 1176.661 + 1595.217 + 1216.958 = $5,109 Mil.
Total Current Assets was $3,914 Mil.
Total Assets was $7,950 Mil.
Property, Plant and Equipment(Net PPE) was $3,376 Mil.
Depreciation, Depletion and Amortization(DDA) was $258 Mil.
Selling, General & Admin. Expense(SGA) was $3,230 Mil.
Total Current Liabilities was $4,623 Mil.
Long-Term Debt was $4,361 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)
=(295.792 / 10426.66) / (196.65 / 9795.156)
=0.02836882 / 0.02007625
=1.4131

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)
=(1252.934 / 9795.156) / (1190.596 / 10426.66)
=0.52157097 / 0.52498758
=0.9935

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 - (4209.813 + 3544.882) / 8366.414) / (1 - (3913.863 + 3376.48) / 7949.965)
=0.07311603 / 0.08297169
=0.8812

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
=10426.66 / 9795.156
=1.0645

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))
=(258.025 / (258.025 + 3376.48)) / (283.943 / (283.943 + 3544.882))
=0.07099316 / 0.0741593
=0.9573

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)
=(3469.991 / 10426.66) / (3229.885 / 9795.156)
=0.33279986 / 0.32974309
=1.0093

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)
=((4387.811 + 4994.661) / 8366.414) / ((4361.144 + 4623.323) / 7949.965)
=1.12144486 / 1.13012661
=0.9923

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
=(1196.933 - -70.02 - 1579.138) / 8366.414
=-0.0373

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.

AutoZone Inc has a M-score of -2.27 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.

AutoZone Inc Annual Data

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
DSRI 0.65240.71831.12541.69920.92071.01991.07621.00041.131.1476
GMI 0.98980.99470.99130.99970.99410.9880.99060.99390.99510.996
AQI 0.88310.9430.97741.04341.04360.88120.98831.14541.02660.9564
SGI 1.04161.03721.05721.04511.08011.09651.06581.06321.03581.0751
DEPI 1.03320.93380.99940.96830.97451.06660.99181.00230.97660.9868
SGAI 1.01911.00431.00940.99990.98871.00061.00210.99581.00991.0108
LVGI 0.99891.01671.03251.12621.04461.07731.02361.00880.97560.995
TATA -0.056-0.0519-0.0532-0.0502-0.0822-0.0754-0.0469-0.0578-0.0362-0.045
M-score -3.08-2.99-2.59-2.06-2.87-2.80-2.59-2.64-2.49-2.51

AutoZone Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 0.93611.10711.1361.131.08350.98591.06361.14761.18641.4131
GMI 0.99690.99790.99810.99510.99440.99480.99430.9960.99490.9935
AQI 1.11330.90940.9031.02661.0891.02291.01860.95640.90330.8812
SGI 1.06681.07611.081.03581.04241.04371.04471.07511.06961.0645
DEPI 0.98340.97860.97360.97660.97970.99520.99710.98680.98330.9573
SGAI 0.99440.99741.00191.00991.01361.01251.01051.01081.00861.0093
LVGI 1.00741.01411.02930.97560.97640.95860.96580.9950.99950.9923
TATA -0.0485-0.0393-0.0467-0.0257-0.015-0.016-0.0202-0.0359-0.0272-0.0373
M-score -2.67-2.54-2.56-2.44-2.40-2.51-2.46-2.47-2.42-2.27
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