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The zones of discrimination for M-Score is as such:
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Good Sign:
Beneish M-Score -2.46 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for Choice Hotels International's Beneish M-Score or its related term are showing as below:
During the past 13 years, the highest Beneish M-Score of Choice Hotels International was -1.97. The lowest was -2.89. And the median was -2.48.
The historical data trend for Choice Hotels International's Beneish M-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Choice Hotels International Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -2.45 | -2.34 | -2.58 | -1.99 | -2.54 |
Choice Hotels International Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Beneish M-Score | Get a 7-Day Free Trial | -1.97 | -2.11 | -2.59 | -2.54 | -2.46 |
For the Lodging subindustry, Choice Hotels International's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's Beneish M-Score falls into.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Choice Hotels International 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 * 0.9001 | + | 0.528 * 1.0951 | + | 0.404 * 1.0322 | + | 0.892 * 1.0449 | + | 0.115 * 1.114 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 1.0553 | + | 4.679 * 0.004519 | - | 0.327 * 1.0441 | |||||||
= | -2.46 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
This Year (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was $256 Mil. Revenue was 331.949 + 358.396 + 425.557 + 427.42 = $1,543 Mil. Gross Profit was 135.553 + 141.532 + 199.588 + 202.005 = $679 Mil. Total Current Assets was $339 Mil. Total Assets was $2,475 Mil. Property, Plant and Equipment(Net PPE) was $603 Mil. Depreciation, Depletion and Amortization(DDA) was $74 Mil. Selling, General, & Admin. Expense(SGA) was $205 Mil. Total Current Liabilities was $920 Mil. Long-Term Debt & Capital Lease Obligation was $1,306 Mil. Net Income was 31.009 + 28.953 + 92.024 + 84.71 = $237 Mil. Non Operating Income was -17.335 + -46.245 + 0.458 + 2.372 = $-61 Mil. Cash Flow from Operations was 1.741 + 49.364 + 121.451 + 113.706 = $286 Mil. |
Total Receivables was $272 Mil. Revenue was 332.792 + 361.982 + 414.266 + 367.974 = $1,477 Mil. Gross Profit was 147.157 + 150.126 + 210.567 + 203.436 = $711 Mil. Total Current Assets was $341 Mil. Total Assets was $2,106 Mil. Property, Plant and Equipment(Net PPE) was $501 Mil. Depreciation, Depletion and Amortization(DDA) was $70 Mil. Selling, General, & Admin. Expense(SGA) was $186 Mil. Total Current Liabilities was $370 Mil. Long-Term Debt & Capital Lease Obligation was $1,445 Mil. |
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
= | (255.744 / 1543.322) | / | (271.932 / 1477.014) | |
= | 0.16571 | / | 0.184109 | |
= | 0.9001 |
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) | |
= | (711.286 / 1477.014) | / | (678.678 / 1543.322) | |
= | 0.48157 | / | 0.439751 | |
= | 1.0951 |
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 Property, Plant and Equipment to Total Assets.
AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
= | (1 - (338.501 + 602.772) / 2475.078) | / | (1 - (341.088 + 500.68) / 2106.223) | |
= | 0.6197 | / | 0.600342 | |
= | 1.0322 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 | |
= | 1543.322 | / | 1477.014 | |
= | 1.0449 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
= | (69.827 / (69.827 + 500.68)) | / | (74.399 / (74.399 + 602.772)) | |
= | 0.122395 | / | 0.109867 | |
= | 1.114 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
= | (205.423 / 1543.322) | / | (186.294 / 1477.014) | |
= | 0.133104 | / | 0.126129 | |
= | 1.0553 |
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 in leverage
LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
= | ((1306.259 + 919.512) / 2475.078) | / | ((1444.522 + 369.574) / 2106.223) | |
= | 0.899273 | / | 0.861303 | |
= | 1.0441 |
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 | |
= | (236.696 - -60.75 | - | 286.262) | / | 2475.078 | |
= | 0.004519 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Choice Hotels International has a M-score of -2.46 suggests that the company is unlikely to be a manipulator.
Thank you for viewing the detailed overview of Choice Hotels International's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Dominic Dragisich | officer: Chief Financial Officer | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Noha Abdalla | officer: Chief Marketing Officer | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
William L Jews | director | C/O FORTRESS INTERNATIONAL GROUP, INC., 7226 LEE DEFOREST DRIVE, SUITE 203, COLUMBIA, MD 21046 |
Scott E Oaksmith | officer: Controller | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Patrick Cimerola | officer: Senior Vice President | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Simone Wu | officer: Senior Vice President | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Brian Bainum | director | 8171 MAPLE LAWN BLVD, SUITE 375, FULTON MD 20759 |
John P Tague | director | |
David A Pepper | officer: SVP, Franchise Development | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
John Bonds | officer: Senior Vice President | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Sanchez Raul Ramirez | officer: Chief Strat & Intl Op Officer | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Elizabeth A Redmond | officer: Principal Accounting Officer | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Donna F Vieira | director | 300 CONTINENTAL DRIVE, NEWARK DE 19713 |
Patrick Pacious | officer: Senior Vice President | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
Liza Landsman | director | 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
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