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Beneish M-Score 1.11 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of Bowl America Inc was 6.01. The lowest was -3.83. And the median was -2.72.
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 Bowl America 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 * 5.0549||+||0.528 * 1.0254||+||0.404 * 1.1075||+||0.892 * 0.9675||+||0.115 * 1.0343|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0067||+||4.679 * -0.031||-||0.327 * 1.0849|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $0.31 Mil.|
Revenue was 4.629 + 4.756 + 7.307 + 5.967 = $22.66 Mil.
Gross Profit was 2.665 + 2.961 + 5.044 + 3.848 = $14.52 Mil.
Total Current Assets was $2.73 Mil.
Total Assets was $33.30 Mil.
Property, Plant and Equipment(Net PPE) was $20.88 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.29 Mil.
Selling, General & Admin. Expense(SGA) was $12.04 Mil.
Total Current Liabilities was $3.18 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.315 + 0.028 + 1.29 + 0.371 = $1.37 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.359 + -2.21 + 2.777 + 1.481 = $2.41 Mil.
|Accounts Receivable was $0.06 Mil.
Revenue was 4.75 + 4.731 + 7.734 + 6.205 = $23.42 Mil.
Gross Profit was 2.755 + 3.026 + 5.519 + 4.087 = $15.39 Mil.
Total Current Assets was $4.48 Mil.
Total Assets was $35.47 Mil.
Property, Plant and Equipment(Net PPE) was $21.67 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.39 Mil.
Selling, General & Admin. Expense(SGA) was $12.36 Mil.
Total Current Liabilities was $3.13 Mil.
Long-Term Debt was $0.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0.313 / 22.659)||/||(0.064 / 23.42)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2.961 / 23.42)||/||(2.665 / 22.659)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2.732 + 20.878) / 33.304)||/||(1 - (4.48 + 21.669) / 35.472)|
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.
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))|
|=||(1.391 / (1.391 + 21.669))||/||(1.293 / (1.293 + 20.878))|
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)|
|=||(12.037 / 22.659)||/||(12.358 / 23.42)|
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)|
|=||((0 + 3.183) / 33.304)||/||((0 + 3.125) / 35.472)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1.374 - 0||-||2.407)||/||33.304|
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.
Bowl America Inc has a M-score of 1.11 signals that the company is likely to be a manipulator.
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
Bowl America Inc Annual Data
Bowl America Inc Quarterly Data