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AutoZone Inc (NYSE:AZO)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

AZO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.21   Max: 1.03
Current: -2.38

-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 -2.47.


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 * 1.1864+0.528 * 0.9949+0.404 * 0.9033+0.892 * 1.0696+0.115 * 0.9833
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0086+4.679 * -0.0188-0.327 * 0.9995
=-2.38

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $248 Mil.
Revenue was 2386.043 + 3290.404 + 2493.021 + 2143.651 = $10,313 Mil.
Gross Profit was 1252.934 + 1727.548 + 1302.789 + 1120.033 = $5,403 Mil.
Total Current Assets was $4,054 Mil.
Total Assets was $8,218 Mil.
Property, Plant and Equipment(Net PPE) was $3,537 Mil.
Depreciation, Depletion and Amortization(DDA) was $275 Mil.
Selling, General & Admin. Expense(SGA) was $3,421 Mil.
Total Current Liabilities was $4,775 Mil.
Long-Term Debt was $4,754 Mil.
Net Income was 258.112 + 401.137 + 309.071 + 211.723 = $1,180 Mil.
Non Operating Income was -70.02 + 0 + 0 + -69.072 = $-139 Mil.
Cash Flow from Operations was 323.502 + 526.011 + 522.574 + 101.31 = $1,473 Mil.
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.



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)
=(248.12 / 10313.119) / (195.521 / 9641.999)
=0.02405868 / 0.02027806
=1.1864

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)
=(1727.548 / 9641.999) / (1252.934 / 10313.119)
=0.52124782 / 0.5239253
=0.9949

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 - (4053.871 + 3537.055) / 8217.528) / (1 - (3707.581 + 3358.064) / 7717.101)
=0.07625188 / 0.08441719
=0.9033

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
=10313.119 / 9641.999
=1.0696

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))
=(256.54 / (256.54 + 3358.064)) / (275.157 / (275.157 + 3537.055))
=0.0709732 / 0.07217778
=0.9833

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)
=(3420.819 / 10313.119) / (3170.812 / 9641.999)
=0.33169587 / 0.32885421
=1.0086

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)
=((4754.101 + 4775.241) / 8217.528) / ((3862.865 + 5090.964) / 7717.101)
=1.15963609 / 1.16025811
=0.9995

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
=(1180.043 - -139.092 - 1473.397) / 8217.528
=-0.0188

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 -2.38 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 -0.0322-0.0271-0.0532-0.0502-0.0822-0.0754-0.0469-0.0578-0.0362-0.045
M-score -2.97-2.87-2.59-2.06-2.87-2.80-2.59-2.64-2.49-2.51

AutoZone Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 1.00040.93611.10711.1361.131.08350.98591.06361.14761.1864
GMI 0.99390.99690.99790.99810.99510.99440.99480.99430.9960.9949
AQI 1.14541.11330.90940.9031.02661.0891.02291.01860.95640.9033
SGI 1.06321.06681.07611.081.03581.04241.04371.04471.07511.0696
DEPI 1.00230.98340.97860.97360.97660.97970.99520.99710.98680.9833
SGAI 0.99580.99440.99741.00191.00991.01361.01251.01051.01081.0086
LVGI 1.00881.00741.01411.02930.97560.97640.95860.96580.9950.9995
TATA -0.0458-0.0485-0.0393-0.0467-0.0257-0.015-0.0073-0.0116-0.0274-0.0188
M-score -2.58-2.67-2.54-2.56-2.44-2.40-2.47-2.42-2.43-2.38
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