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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 * 2.2681||+||0.528 * 1.0104||+||0.404 * 1.0851||+||0.892 * 0.9712||+||0.115 * 1.0483|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0015||+||4.679 * -0.0328||-||0.327 * 1.0935|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $0.32 Mil.|
Revenue was 5.97 + 4.629 + 4.756 + 7.307 = $22.66 Mil.
Gross Profit was 3.939 + 2.665 + 2.961 + 5.044 = $14.61 Mil.
Total Current Assets was $3.09 Mil.
Total Assets was $33.25 Mil.
Property, Plant and Equipment(Net PPE) was $20.64 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.26 Mil.
Selling, General & Admin. Expense(SGA) was $12.01 Mil.
Total Current Liabilities was $3.72 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.482 + -0.315 + 0.028 + 1.29 = $1.49 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.65 + 0.359 + -2.21 + 2.777 = $2.58 Mil.
|Accounts Receivable was $0.14 Mil.
Revenue was 5.967 + 4.75 + 4.978 + 7.639 = $23.33 Mil.
Gross Profit was 3.848 + 2.755 + 3.12 + 5.476 = $15.20 Mil.
Total Current Assets was $4.78 Mil.
Total Assets was $35.54 Mil.
Property, Plant and Equipment(Net PPE) was $21.38 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.37 Mil.
Selling, General & Admin. Expense(SGA) was $12.35 Mil.
Total Current Liabilities was $3.63 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)|
|=||(0.315 / 22.662)||/||(0.143 / 23.334)|
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)|
|=||(2.665 / 23.334)||/||(3.939 / 22.662)|
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 - (3.087 + 20.636) / 33.248)||/||(1 - (4.779 + 21.375) / 35.536)|
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))|
|=||(1.37 / (1.37 + 21.375))||/||(1.258 / (1.258 + 20.636))|
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)|
|=||(12.007 / 22.662)||/||(12.345 / 23.334)|
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 + 3.718) / 33.248)||/||((0 + 3.634) / 35.536)|
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|
|=||(1.485 - 0||-||2.576)||/||33.248|
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 -1.48 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