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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 Copart Inc was -0.22. The lowest was -3.92. And the median was -2.61.
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 * 1.1589||+||0.528 * 0.9772||+||0.404 * 0.7802||+||0.892 * 0.9749||+||0.115 * 1.1548|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8487||+||4.679 * -0.0232||-||0.327 * 1.4437|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|Accounts Receivable was $231 Mil.|
Revenue was 288.838 + 282.293 + 297.142 + 276.258 = $1,145 Mil.
Gross Profit was 120.861 + 118.784 + 127.417 + 114.867 = $482 Mil.
Total Current Assets was $786 Mil.
Total Assets was $1,856 Mil.
Property, Plant and Equipment(Net PPE) was $706 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $134 Mil.
Total Current Liabilities was $224 Mil.
Long-Term Debt was $584 Mil.
Net Income was 52.413 + 57.412 + 57.563 + 52.193 = $220 Mil.
Non Operating Income was 1.027 + 0.053 + -0.815 + 4.141 = $4 Mil.
Cash Flow from Operations was 76.594 + 61.707 + 114.486 + 5.517 = $258 Mil.
|Accounts Receivable was $205 Mil.
Revenue was 290.386 + 287.45 + 309.722 + 286.434 = $1,174 Mil.
Gross Profit was 122.308 + 116.939 + 132.252 + 111.546 = $483 Mil.
Total Current Assets was $458 Mil.
Total Assets was $1,537 Mil.
Property, Plant and Equipment(Net PPE) was $692 Mil.
Depreciation, Depletion and Amortization(DDA) was $53 Mil.
Selling, General & Admin. Expense(SGA) was $162 Mil.
Total Current Liabilities was $260 Mil.
Long-Term Debt was $204 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)|
|=||(231.403 / 1144.531)||/||(204.81 / 1173.992)|
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)|
|=||(118.784 / 1173.992)||/||(120.861 / 1144.531)|
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 - (785.656 + 705.59) / 1855.764)||/||(1 - (457.766 + 691.981) / 1536.586)|
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))|
|=||(53.189 / (53.189 + 691.981))||/||(46.488 / (46.488 + 705.59))|
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)|
|=||(133.683 / 1144.531)||/||(161.565 / 1173.992)|
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)|
|=||((584.302 + 223.926) / 1855.764)||/||((203.868 + 259.691) / 1536.586)|
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|
|=||(219.581 - 4.406||-||258.304)||/||1855.764|
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 -2.67 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