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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 Capella Education Co was 10000000.00. The lowest was -10000000.00. And the median was -3.15.
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 Capella Education Co 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 * 1.1432||+||0.528 * 1.0053||+||0.404 * 1.0547||+||0.892 * 1.0084||+||0.115 * 0.936|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0044||+||4.679 * -0.0855||-||0.327 * 1.0818|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $18.7 Mil.|
Revenue was 106.725 + 105.448 + 109.475 + 103.711 = $425.4 Mil.
Gross Profit was 61.223 + 60.137 + 62.274 + 55.49 = $239.1 Mil.
Total Current Assets was $163.7 Mil.
Total Assets was $267.1 Mil.
Property, Plant and Equipment(Net PPE) was $33.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.2 Mil.
Selling, General & Admin. Expense(SGA) was $171.4 Mil.
Total Current Liabilities was $61.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 9.695 + 9.298 + 11.648 + 8.172 = $38.8 Mil.
Non Operating Income was 0.042 + -0.009 + -0.15 + 0.024 = $-0.1 Mil.
Cash Flow from Operations was 20.348 + 21.995 + 8.66 + 10.75 = $61.8 Mil.
|Accounts Receivable was $16.2 Mil.
Revenue was 104.584 + 105.701 + 108.442 + 103.097 = $421.8 Mil.
Gross Profit was 59.057 + 60.459 + 62.912 + 55.954 = $238.4 Mil.
Total Current Assets was $162.7 Mil.
Total Assets was $267.0 Mil.
Property, Plant and Equipment(Net PPE) was $38.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.6 Mil.
Selling, General & Admin. Expense(SGA) was $169.2 Mil.
Total Current Liabilities was $57.2 Mil.
Long-Term Debt was $0.0 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)|
|=||(18.702 / 425.359)||/||(16.224 / 421.824)|
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)|
|=||(238.382 / 421.824)||/||(239.124 / 425.359)|
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 - (163.656 + 33.765) / 267.104)||/||(1 - (162.65 + 38.3) / 266.99)|
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))|
|=||(22.592 / (22.592 + 38.3))||/||(22.172 / (22.172 + 33.765))|
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)|
|=||(171.387 / 425.359)||/||(169.225 / 421.824)|
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 + 61.939) / 267.104)||/||((0 + 57.229) / 266.99)|
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|
|=||(38.813 - -0.093||-||61.753)||/||267.104|
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.
Capella Education Co has a M-score of -2.75 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
Capella Education Co Annual Data
Capella Education Co Quarterly Data