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GuruFocus has detected 3 Warning Signs with Copart Inc $CPRT.
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Copart Inc (NAS:CPRT)
Beneish M-Score
-2.44 (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.

Copart Inc has a M-score of -2.44 suggests that the company is not a manipulator.

CPRT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.92   Max: -0.22
Current: -2.44

-3.92
-0.22

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 -2.58.


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 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 * 1.028+0.528 * 0.9794+0.404 * 0.7393+0.892 * 1.1776+0.115 * 0.9835
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9628+4.679 * -0.0102-0.327 * 0.9441
=-2.44

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $340 Mil.
Revenue was 349.532 + 345.991 + 332.659 + 347.246 = $1,375 Mil.
Gross Profit was 146.765 + 145.293 + 141.464 + 157.647 = $591 Mil.
Total Current Assets was $659 Mil.
Total Assets was $1,841 Mil.
Property, Plant and Equipment(Net PPE) was $882 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General & Admin. Expense(SGA) was $156 Mil.
Total Current Liabilities was $346 Mil.
Long-Term Debt was $566 Mil.
Net Income was 66.066 + 167.28 + 84.968 + 74.016 = $392 Mil.
Non Operating Income was -3.021 + 3.332 + 6.051 + 0.039 = $6 Mil.
Cash Flow from Operations was 81.235 + 74.293 + 125 + 124.177 = $405 Mil.
Accounts Receivable was $281 Mil.
Revenue was 299.706 + 288.838 + 282.293 + 297.142 = $1,168 Mil.
Gross Profit was 124.614 + 120.861 + 118.784 + 127.417 = $492 Mil.
Total Current Assets was $507 Mil.
Total Assets was $1,604 Mil.
Property, Plant and Equipment(Net PPE) was $744 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $138 Mil.
Total Current Liabilities was $265 Mil.
Long-Term Debt was $577 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)
=(340.438 / 1375.428) / (281.227 / 1167.979)
=0.24751423 / 0.24078087
=1.028

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)
=(491.676 / 1167.979) / (591.169 / 1375.428)
=0.42096305 / 0.4298073
=0.9794

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 - (659.252 + 882.256) / 1841.241) / (1 - (506.858 + 744.224) / 1604.364)
=0.16278858 / 0.22020065
=0.7393

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
=1375.428 / 1167.979
=1.1776

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))
=(46.82 / (46.82 + 744.224)) / (56.495 / (56.495 + 882.256))
=0.05918761 / 0.06018103
=0.9835

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)
=(155.945 / 1375.428) / (137.543 / 1167.979)
=0.11337925 / 0.11776154
=0.9628

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)
=((565.926 + 345.947) / 1841.241) / ((576.501 + 265.117) / 1604.364)
=0.49524913 / 0.52458046
=0.9441

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
=(392.33 - 6.401 - 404.705) / 1841.241
=-0.0102

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 -2.44 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.

Copart Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 1.03640.72611.0330.95980.99820.3863.21190.33761.0921.0588
GMI 0.91671.15880.97710.93331.05320.96461.10180.99880.95490.9824
AQI 1.43571.07450.81870.88821.25950.9531.23411.01610.75761.0004
SGI 1.06071.39980.94681.04011.12861.05961.13221.11190.9851.1068
DEPI 1.03971.04711.07081.03070.99130.93290.98131.07291.10351.1389
SGAI 1.01710.94681.08871.20460.87531.00421.0641.07280.85750.8979
LVGI 1.2261.17450.730.89635.17061.06050.83310.7741.44061.1433
TATA -0.0457-0.0432-0.0598-0.0392-0.0726-0.0435-0.0171-0.0579-0.0279-0.0447
M-score -2.55-2.51-2.78-2.74-3.92-3.26-0.22-3.18-2.77-2.56

Copart Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.01111.0091.11541.0921.15891.191.14671.05881.09831.028
GMI 0.94610.94630.95380.95490.97720.99270.97620.98240.98090.9794
AQI 0.91610.69470.6630.75760.78021.1451.1931.00040.86010.7393
SGI 1.07961.05071.01010.9850.97491.00361.05811.10681.15821.1776
DEPI 1.08961.06841.0681.10351.15481.17651.25441.13891.0440.9835
SGAI 0.99950.93530.86160.87520.8670.89550.92670.92190.95210.9628
LVGI 0.78351.19271.22581.44061.44371.21481.29971.14331.20710.9441
TATA -0.0598-0.0438-0.0249-0.0279-0.0232-0.0235-0.0195-0.04450.0234-0.0102
M-score -2.66-2.83-2.68-2.77-2.67-2.39-2.38-2.57-2.26-2.44
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