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AutoZone Inc (NYSE:AZO)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

AZO' s 10-Year Beneish M-Score Range
Min: -3.21   Max: 1.03
Current: -2.56

-3.21
1.03

During the past 13 years, the highest Beneish M-Score of AutoZone Inc was 1.03. The lowest was -3.21. 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 * 1.136+0.528 * 0.9981+0.404 * 0.903+0.892 * 1.08+0.115 * 0.9736
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0019+4.679 * -0.0467-0.327 * 1.0293
=-2.56

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $191 Mil.
Revenue was 2341.545 + 1990.494 + 2093.578 + 3095.414 = $9,521 Mil.
Gross Profit was 1216.958 + 1037.035 + 1085.697 + 1604.375 = $4,944 Mil.
Total Current Assets was $3,588 Mil.
Total Assets was $7,372 Mil.
Property, Plant and Equipment(Net PPE) was $3,193 Mil.
Depreciation, Depletion and Amortization(DDA) was $244 Mil.
Selling, General & Admin. Expense(SGA) was $3,108 Mil.
Total Current Liabilities was $4,604 Mil.
Long-Term Debt was $4,163 Mil.
Net Income was 285.157 + 192.83 + 218.087 + 371.199 = $1,067 Mil.
Non Operating Income was 0 + -78.98 + 0 + 0 = $-79 Mil.
Cash Flow from Operations was 463.146 + 150.629 + 357.343 + 519.147 = $1,490 Mil.
Accounts Receivable was $156 Mil.
Revenue was 2205.878 + 1855.198 + 1991.04 + 2763.586 = $8,816 Mil.
Gross Profit was 1142.713 + 961.981 + 1031.866 + 1432.395 = $4,569 Mil.
Total Current Assets was $3,178 Mil.
Total Assets was $6,783 Mil.
Property, Plant and Equipment(Net PPE) was $3,003 Mil.
Depreciation, Depletion and Amortization(DDA) was $223 Mil.
Selling, General & Admin. Expense(SGA) was $2,872 Mil.
Total Current Liabilities was $3,836 Mil.
Long-Term Debt was $4,001 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)
=(190.848 / 9521.031) / (155.55 / 8815.702)
=0.02004489 / 0.01764465
=1.136

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)
=(1037.035 / 8815.702) / (1216.958 / 9521.031)
=0.51827466 / 0.51927832
=0.9981

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 - (3587.844 + 3193.289) / 7371.802) / (1 - (3178.323 + 3002.823) / 6783.041)
=0.08012546 / 0.08873527
=0.903

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
=9521.031 / 8815.702
=1.08

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))
=(222.586 / (222.586 + 3002.823)) / (243.605 / (243.605 + 3193.289))
=0.06901016 / 0.0708794
=0.9736

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)
=(3107.823 / 9521.031) / (2872.022 / 8815.702)
=0.32641665 / 0.32578483
=1.0019

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)
=((4163.244 + 4603.952) / 7371.802) / ((4001.1 + 3836.049) / 6783.041)
=1.18928805 / 1.15540345
=1.0293

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
=(1067.273 - -78.98 - 1490.265) / 7371.802
=-0.0467

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 -2.56 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

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
DSRI 1.51311.70730.65240.71831.12541.69920.92071.01991.07621.0004
GMI 0.94241.00010.98980.99470.99130.99970.99410.9880.99060.9939
AQI 0.92980.95040.88310.9430.97741.04341.04360.88120.98831.1454
SGI 1.0331.01311.04161.03721.05721.04511.08011.09651.06581.0632
DEPI 1.02860.87941.03320.93380.99940.96830.97451.06660.99181.0023
SGAI 1.06551.02021.01911.00431.00940.99990.98871.00061.00210.9958
LVGI 1.05340.93510.99891.01671.03251.12621.04461.07731.02361.0088
TATA 0.00530.006-0.0322-0.0271-0.0532-0.0502-0.0822-0.0754-0.0469-0.0578
M-score -2.04-1.81-2.97-2.87-2.59-2.06-2.87-2.80-2.59-2.64

AutoZone Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 0.95470.9121.07621.20891.06061.11741.00040.93611.10711.136
GMI 0.98930.99030.99060.98950.98910.990.99390.99690.99790.9981
AQI 0.8530.90370.98830.9771.27561.24721.14541.11330.90940.903
SGI 1.08151.0771.06581.05671.04471.03931.06321.06681.07611.08
DEPI 1.07991.06170.99181.02290.98950.98581.00230.98340.97860.9736
SGAI 1.00311.00151.00211.00441.00321.00150.99580.99440.99741.0019
LVGI 1.02861.0341.02361.01451.01280.99141.00881.00741.01411.0293
TATA -0.0701-0.0464-0.0469-0.0402-0.0359-0.0397-0.0458-0.0485-0.0393-0.0467
M-score -2.84-2.76-2.59-2.44-2.45-2.43-2.58-2.67-2.54-2.56
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