Switch to:
AutoZone Inc (NYSE:AZO)
Beneish M-Score
-2.35 (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 -2.35 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: -2.35

-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 -2.51.


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 * 1.3122+0.528 * 0.9921+0.404 * 0.8965+0.892 * 1.0584+0.115 * 0.9577
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0124+4.679 * -0.034-0.327 * 0.9876
=-2.35

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $295 Mil.
Revenue was 2593.672 + 2257.192 + 2386.043 + 3290.404 = $10,527 Mil.
Gross Profit was 1370.458 + 1190.596 + 1252.934 + 1727.548 = $5,542 Mil.
Total Current Assets was $4,225 Mil.
Total Assets was $8,464 Mil.
Property, Plant and Equipment(Net PPE) was $3,619 Mil.
Depreciation, Depletion and Amortization(DDA) was $290 Mil.
Selling, General & Admin. Expense(SGA) was $3,515 Mil.
Total Current Liabilities was $4,648 Mil.
Long-Term Debt was $4,954 Mil.
Net Income was 327.515 + 228.613 + 258.112 + 401.137 = $1,215 Mil.
Non Operating Income was 0 + 0 + -70.02 + 0 = $-70 Mil.
Cash Flow from Operations was 516.347 + 207.051 + 323.502 + 526.011 = $1,573 Mil.
Accounts Receivable was $212 Mil.
Revenue was 2493.021 + 2143.651 + 2260.264 + 3049.696 = $9,947 Mil.
Gross Profit was 1302.789 + 1120.033 + 1176.661 + 1595.217 = $5,195 Mil.
Total Current Assets was $3,950 Mil.
Total Assets was $8,032 Mil.
Property, Plant and Equipment(Net PPE) was $3,426 Mil.
Depreciation, Depletion and Amortization(DDA) was $262 Mil.
Selling, General & Admin. Expense(SGA) was $3,281 Mil.
Total Current Liabilities was $4,693 Mil.
Long-Term Debt was $4,533 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)
=(294.529 / 10527.311) / (212.068 / 9946.632)
=0.02797761 / 0.02132058
=1.3122

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)
=(5194.7 / 9946.632) / (5541.536 / 10527.311)
=0.52225718 / 0.52639615
=0.9921

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 - (4225.486 + 3619.305) / 8464.105) / (1 - (3950.49 + 3426.388) / 8032.44)
=0.07316946 / 0.0816143
=0.8965

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
=10527.311 / 9946.632
=1.0584

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))
=(262.192 / (262.192 + 3426.388)) / (290.173 / (290.173 + 3619.305))
=0.0710821 / 0.07422295
=0.9577

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)
=(3515.235 / 10527.311) / (3280.719 / 9946.632)
=0.33391575 / 0.32983215
=1.0124

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)
=((4953.697 + 4647.589) / 8464.105) / ((4533.329 + 4693.102) / 8032.44)
=1.13435337 / 1.14864612
=0.9876

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
=(1215.377 - -70.02 - 1572.911) / 8464.105
=-0.034

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 -2.35 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 1.03320.93380.99940.96831.0050.99211.03381.00230.97660.9868
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 -3.08-2.99-2.59-2.06-2.86-2.81-2.58-2.64-2.49-2.51

AutoZone Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1.10711.1361.131.08350.98591.06361.14761.18641.41311.3122
GMI 0.99790.99810.99510.99440.99480.99430.9960.99490.99350.9921
AQI 0.90940.9031.02661.0891.02291.01860.95640.90330.88120.8965
SGI 1.07611.081.03581.04241.04371.04471.07511.06961.06451.0584
DEPI 0.97860.97360.97660.97970.99520.99710.98680.98330.95730.9577
SGAI 0.99741.00191.00991.01361.01251.01051.01081.00861.00931.0124
LVGI 1.01411.02930.97560.97640.95860.96580.9950.99950.99230.9876
TATA -0.0393-0.0467-0.0257-0.015-0.016-0.0202-0.0359-0.0272-0.0373-0.034
M-score -2.54-2.56-2.44-2.40-2.51-2.46-2.47-2.42-2.27-2.35
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK