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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 6.03. The lowest was -14.71. 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 * 0.7436||+||0.528 * 0.9866||+||0.404 * 1.1219||+||0.892 * 1.0435||+||0.115 * 1.1618|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9515||+||4.679 * -0.02||-||0.327 * 1.0888|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $0.05 Mil.|
Revenue was 6.235 + 5.064 + 5.75 + 7.421 = $24.47 Mil.
Gross Profit was 4.185 + 3.113 + 3.757 + 5.255 = $16.31 Mil.
Total Current Assets was $2.88 Mil.
Total Assets was $31.53 Mil.
Property, Plant and Equipment(Net PPE) was $19.13 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.05 Mil.
Selling, General & Admin. Expense(SGA) was $11.84 Mil.
Total Current Liabilities was $4.18 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.696 + -0.001 + 0.519 + 1.271 = $2.49 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.775 + 0.084 + -1.733 + 2.989 = $3.12 Mil.
|Accounts Receivable was $0.06 Mil.
Revenue was 6.006 + 4.92 + 5.009 + 7.516 = $23.45 Mil.
Gross Profit was 3.996 + 2.94 + 3.239 + 5.246 = $15.42 Mil.
Total Current Assets was $3.04 Mil.
Total Assets was $31.33 Mil.
Property, Plant and Equipment(Net PPE) was $19.86 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.27 Mil.
Selling, General & Admin. Expense(SGA) was $11.92 Mil.
Total Current Liabilities was $3.82 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)|
|=||(0.045 / 24.47)||/||(0.058 / 23.451)|
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)|
|=||(15.421 / 23.451)||/||(16.31 / 24.47)|
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 - (2.877 + 19.127) / 31.529)||/||(1 - (3.039 + 19.855) / 31.331)|
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))|
|=||(1.274 / (1.274 + 19.855))||/||(1.047 / (1.047 + 19.127))|
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)|
|=||(11.837 / 24.47)||/||(11.922 / 23.451)|
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 + 4.18) / 31.529)||/||((0 + 3.815) / 31.331)|
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|
|=||(2.485 - 0||-||3.115)||/||31.529|
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 -2.73 suggests that the company will not 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