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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.
Copart Inc has a M-score of -2.34 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Copart Inc was -2.05. The lowest was -3.97. And the median was -2.58.
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 Copart 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 * 1.0296||+||0.528 * 1.0363||+||0.404 * 1.3261||+||0.892 * 1.1293||+||0.115 * 0.9996|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1323||+||4.679 * -0.0405||-||0.327 * 0.8237|
|This Year (Apr14) TTM:||Last Year (Apr13) TTM:|
|Accounts Receivable was $196 Mil.|
Revenue was 309.722 + 286.434 + 279.883 + 263.697 = $1,140 Mil.
Gross Profit was 132.252 + 111.546 + 107.836 + 103.072 = $455 Mil.
Total Current Assets was $386 Mil.
Total Assets was $1,477 Mil.
Property, Plant and Equipment(Net PPE) was $686 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $163 Mil.
Total Current Liabilities was $257 Mil.
Long-Term Debt was $242 Mil.
Net Income was 40.877 + 45.345 + 41.422 + 41.304 = $169 Mil.
Non Operating Income was 0.708 + 1.17 + 1.423 + 1.466 = $5 Mil.
Cash Flow from Operations was 131.843 + 8.076 + 67.715 + 16.323 = $224 Mil.
|Accounts Receivable was $169 Mil.
Revenue was 277.638 + 266.185 + 238.866 + 226.556 = $1,009 Mil.
Gross Profit was 115.597 + 96.817 + 105.436 + 99.426 = $417 Mil.
Total Current Assets was $353 Mil.
Total Assets was $1,299 Mil.
Property, Plant and Equipment(Net PPE) was $677 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $128 Mil.
Total Current Liabilities was $218 Mil.
Long-Term Debt was $314 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)|
|=||(195.968 / 1139.736)||/||(168.539 / 1009.245)|
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)|
|=||(111.546 / 1009.245)||/||(132.252 / 1139.736)|
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 - (385.754 + 685.564) / 1476.672)||/||(1 - (353.162 + 676.698) / 1298.682)|
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))|
|=||(54.099 / (54.099 + 676.698))||/||(54.829 / (54.829 + 685.564))|
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)|
|=||(163.474 / 1139.736)||/||(127.842 / 1009.245)|
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)|
|=||((242.106 + 256.742) / 1476.672)||/||((314.23 + 218.377) / 1298.682)|
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|
|=||(168.948 - 4.767||-||223.957)||/||1476.672|
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.
Copart Inc has a M-score of -2.34 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
Copart Inc Annual Data
Copart Inc Quarterly Data