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GuruFocus has detected 3 Warning Signs with Cabela's Inc $CAB.
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Cabela's Inc (NYSE:CAB)
Beneish M-Score
-2.77 (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.

Cabela's Inc has a M-score of -2.77 suggests that the company is not a manipulator.

CAB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.07   Max: -2.14
Current: -2.77

-3.07
-2.14

During the past 13 years, the highest Beneish M-Score of Cabela's Inc was -2.14. The lowest was -3.07. And the median was -2.59.


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 Cabela's 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 * 0.9292+0.528 * 1.038+0.404 * 0.7187+0.892 * 1.0329+0.115 * 0.8898
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9867+4.679 * -0.0361-0.327 * 0.9426
=-2.77

* 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 $76 Mil.
Revenue was 1338.305 + 996.495 + 929.897 + 864.662 = $4,129 Mil.
Gross Profit was 520.482 + 407.025 + 398.35 + 376.517 = $1,702 Mil.
Total Current Assets was $7,037 Mil.
Total Assets was $8,971 Mil.
Property, Plant and Equipment(Net PPE) was $1,807 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General & Admin. Expense(SGA) was $1,414 Mil.
Total Current Liabilities was $2,690 Mil.
Long-Term Debt was $3,138 Mil.
Net Income was 58.059 + 28.24 + 37.759 + 22.889 = $147 Mil.
Non Operating Income was 0.58 + 0.88 + 2.78 + 0.901 = $5 Mil.
Cash Flow from Operations was 222.808 + 65.369 + 151.833 + 25.39 = $465 Mil.
Accounts Receivable was $79 Mil.
Revenue was 1407.827 + 926.523 + 836.276 + 827.076 = $3,998 Mil.
Gross Profit was 554.822 + 412.029 + 383.282 + 360.637 = $1,711 Mil.
Total Current Assets was $6,485 Mil.
Total Assets was $8,463 Mil.
Property, Plant and Equipment(Net PPE) was $1,811 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $1,388 Mil.
Total Current Liabilities was $2,476 Mil.
Long-Term Debt was $3,357 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)
=(76.14 / 4129.359) / (79.33 / 3997.702)
=0.0184387 / 0.0198439
=0.9292

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)
=(1710.77 / 3997.702) / (1702.374 / 4129.359)
=0.42793835 / 0.41226108
=1.038

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 - (7036.578 + 1807.209) / 8970.824) / (1 - (6484.945 + 1811.302) / 8463.004)
=0.01416113 / 0.01970423
=0.7187

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
=4129.359 / 3997.702
=1.0329

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))
=(132.696 / (132.696 + 1811.302)) / (150.163 / (150.163 + 1807.209))
=0.06825933 / 0.07671664
=0.8898

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)
=(1414.312 / 4129.359) / (1387.647 / 3997.702)
=0.34250158 / 0.34711117
=0.9867

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)
=((3138.085 + 2689.77) / 8970.824) / ((3357.157 + 2475.576) / 8463.004)
=0.64964545 / 0.68920362
=0.9426

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
=(146.947 - 5.141 - 465.4) / 8970.824
=-0.0361

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.

Cabela's Inc has a M-score of -2.77 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 local exchange's currency.

Cabela's Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.08830.89940.67621.46180.94560.88310.80441.43551.16080.9292
GMI 1.00721.04211.0140.95770.95850.98770.98991.00151.01691.038
AQI 0.86151.03721.35390.27120.82150.78910.70391.00211.16790.7187
SGI 1.13861.08641.03121.01181.05551.10731.15641.01341.0961.0329
DEPI 1.13630.90820.8551.01621.0351.05611.07611.01830.96260.8898
SGAI 1.00680.97160.97481.0171.00950.99090.99251.02771.01180.9867
LVGI 1.0580.8260.94981.56510.85281.09140.97451.11311.01880.9426
TATA 0.0222-0.0356-0.1009-0.0138-0.045-0.0117-0.0195-0.0083-0.018-0.0361
M-score -2.23-2.57-3.07-2.61-2.73-2.66-2.72-2.14-2.27-2.77

Cabela's Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.82731.43551.03181.08291.04891.16081.07281.23440.92440.9292
GMI 0.97951.00151.00711.01451.01211.01691.01621.02891.051.038
AQI 0.89131.00210.89590.8240.92321.16791.21571.25971.25140.7187
SGI 1.00891.01341.06421.08411.08481.0961.07641.07971.08651.0329
DEPI 1.04481.01831.01311.0131.00810.96260.95580.89540.87790.8898
SGAI 1.02731.02770.9991.00551.03451.01181.00840.98280.96780.9867
LVGI 1.06311.11311.05971.05651.01151.01881.01170.97090.97120.9426
TATA -0.0018-0.0083-0.0163-0.0134-0.0164-0.018-0.0222-0.029-0.0452-0.0361
M-score -2.71-2.14-2.53-2.47-2.47-2.27-2.36-2.21-2.56-2.77
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