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AutoZone Inc (NYSE:AZO)
Beneish M-Score
-2.44 (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 -2.44 suggests that the company is not a manipulator.

AZO' s 10-Year Beneish M-Score Range
Min: -3.25   Max: 1.03
Current: -2.44

-3.25
1.03

During the past 13 years, the highest Beneish M-Score of AutoZone Inc was 1.03. The lowest was -3.25. And the median was -2.54.


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 * 1.0835+0.528 * 0.9944+0.404 * 1.089+0.892 * 1.0424+0.115 * 0.9797
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0136+4.679 * -0.0246-0.327 * 0.9764
=-2.44

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $196 Mil.
Revenue was 2260.264 + 3049.696 + 2341.545 + 1990.494 = $9,642 Mil.
Gross Profit was 1176.661 + 1595.217 + 1216.958 + 1037.035 = $5,026 Mil.
Total Current Assets was $3,708 Mil.
Total Assets was $7,717 Mil.
Property, Plant and Equipment(Net PPE) was $3,358 Mil.
Depreciation, Depletion and Amortization(DDA) was $257 Mil.
Selling, General & Admin. Expense(SGA) was $3,171 Mil.
Total Current Liabilities was $5,091 Mil.
Long-Term Debt was $3,863 Mil.
Net Income was 238.31 + 373.67 + 285.157 + 192.83 = $1,090 Mil.
Non Operating Income was 0 + 0 + 0 + -78.98 = $-79 Mil.
Cash Flow from Operations was 375.228 + 370.116 + 463.146 + 150.629 = $1,359 Mil.
Accounts Receivable was $173 Mil.
Revenue was 2093.578 + 3095.414 + 2205.878 + 1855.198 = $9,250 Mil.
Gross Profit was 1085.697 + 1604.375 + 1142.713 + 961.981 = $4,795 Mil.
Total Current Assets was $3,370 Mil.
Total Assets was $7,023 Mil.
Property, Plant and Equipment(Net PPE) was $3,109 Mil.
Depreciation, Depletion and Amortization(DDA) was $232 Mil.
Selling, General & Admin. Expense(SGA) was $3,001 Mil.
Total Current Liabilities was $4,333 Mil.
Long-Term Debt was $4,013 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)
=(195.521 / 9641.999) / (173.114 / 9250.068)
=0.02027806 / 0.01871489
=1.0835

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)
=(1595.217 / 9250.068) / (1176.661 / 9641.999)
=0.51834927 / 0.52124782
=0.9944

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 - (3707.581 + 3358.064) / 7717.101) / (1 - (3370.235 + 3108.77) / 7023.423)
=0.08441719 / 0.07751462
=1.089

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
=9641.999 / 9250.068
=1.0424

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))
=(232.323 / (232.323 + 3108.77)) / (256.54 / (256.54 + 3358.064))
=0.06953503 / 0.0709732
=0.9797

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)
=(3170.812 / 9641.999) / (3001.219 / 9250.068)
=0.32885421 / 0.32445372
=1.0136

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)
=((3862.865 + 5090.964) / 7717.101) / ((4013.244 + 4332.825) / 7023.423)
=1.16025811 / 1.18831929
=0.9764

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
=(1089.967 - -78.98 - 1359.119) / 7717.101
=-0.0246

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 -2.44 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

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
DSRI 1.70730.65240.71831.12541.69920.92071.01991.07621.00041.13
GMI 1.00010.98980.99470.99130.99970.99410.9880.99060.99390.9951
AQI 0.95040.88310.9430.97741.04341.04360.88120.98831.14541.0588
SGI 1.01311.04161.03721.05721.04511.08011.09651.06581.06321.0358
DEPI 0.87941.03320.93380.99940.96830.97451.06660.99181.00230.9766
SGAI 1.02021.01911.00431.00940.99990.98871.00061.00210.99581.0099
LVGI 0.93510.99891.01671.03251.12621.04461.07731.02361.00880.9752
TATA 0.006-0.0322-0.0271-0.0532-0.0502-0.0822-0.0754-0.0469-0.0578-0.0361
M-score -1.81-2.97-2.87-2.59-2.06-2.87-2.80-2.59-2.64-2.47

AutoZone Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 1.07621.20891.06061.11741.00040.93611.10711.1361.131.0835
GMI 0.99060.98950.98910.990.99390.99690.99790.99810.99510.9944
AQI 0.98830.9771.27561.24721.14541.11330.90940.9031.05881.089
SGI 1.06581.05671.04471.03931.06321.06681.07611.081.03581.0424
DEPI 0.99181.02290.98950.98581.00230.98340.97860.97360.97660.9797
SGAI 1.00211.00441.00321.00150.99580.99440.99741.00191.00991.0136
LVGI 1.02361.01451.01280.99141.00881.00741.01411.02930.97520.9764
TATA -0.0469-0.0402-0.0359-0.0397-0.0458-0.0485-0.0393-0.0467-0.0256-0.0246
M-score -2.59-2.44-2.45-2.43-2.58-2.67-2.54-2.56-2.42-2.44
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