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Cintas Corp (NAS:CTAS)
Beneish M-Score
-2.86 (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.

Cintas Corp has a M-score of -2.86 suggests that the company is not a manipulator.

CTAS' s 10-Year Beneish M-Score Range
Min: -3.12   Max: -2.01
Current: -2.86

-3.12
-2.01

During the past 13 years, the highest Beneish M-Score of Cintas Corp was -2.01. The lowest was -3.12. And the median was -2.59.


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 Cintas Corp 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 * 0.9223+0.528 * 0.9693+0.404 * 1.0011+0.892 * 1.0194+0.115 * 1.1467
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9867+4.679 * -0.0661-0.327 * 1.0458
=-2.86

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Feb15) TTM:Last Year (Feb14) TTM:
Accounts Receivable was $498 Mil.
Revenue was 1108.847 + 1123.379 + 1102.077 + 1216.662 = $4,551 Mil.
Gross Profit was 475.307 + 481.424 + 477.946 + 521.578 = $1,956 Mil.
Total Current Assets was $1,710 Mil.
Total Assets was $4,266 Mil.
Property, Plant and Equipment(Net PPE) was $853 Mil.
Depreciation, Depletion and Amortization(DDA) was $139 Mil.
Selling, General & Admin. Expense(SGA) was $1,270 Mil.
Total Current Liabilities was $579 Mil.
Long-Term Debt was $1,300 Mil.
Net Income was 94.883 + 120.412 + 110.108 + 127.224 = $453 Mil.
Non Operating Income was 0 + 0 + 28.358 + 106.441 = $135 Mil.
Cash Flow from Operations was 85.073 + 144.372 + 148.201 + 222.196 = $600 Mil.
Accounts Receivable was $530 Mil.
Revenue was 1110.973 + 1123.931 + 1100.246 + 1129.086 = $4,464 Mil.
Gross Profit was 469.634 + 467.079 + 456.095 + 467.215 = $1,860 Mil.
Total Current Assets was $1,665 Mil.
Total Assets was $4,400 Mil.
Property, Plant and Equipment(Net PPE) was $981 Mil.
Depreciation, Depletion and Amortization(DDA) was $188 Mil.
Selling, General & Admin. Expense(SGA) was $1,263 Mil.
Total Current Liabilities was $553 Mil.
Long-Term Debt was $1,301 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)
=(497.978 / 4550.965) / (529.668 / 4464.236)
=0.10942251 / 0.11864695
=0.9223

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)
=(481.424 / 4464.236) / (475.307 / 4550.965)
=0.41664979 / 0.42985499
=0.9693

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 - (1710.125 + 853.391) / 4266.346) / (1 - (1664.909 + 981.197) / 4400.441)
=0.39913078 / 0.39867254
=1.0011

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
=4550.965 / 4464.236
=1.0194

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))
=(187.707 / (187.707 + 981.197)) / (138.975 / (138.975 + 853.391))
=0.16058376 / 0.1400441
=1.1467

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)
=(1269.925 / 4550.965) / (1262.568 / 4464.236)
=0.27904521 / 0.28281838
=0.9867

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)
=((1300 + 579.231) / 4266.346) / ((1300.523 + 552.802) / 4400.441)
=0.44047787 / 0.42116801
=1.0458

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
=(452.627 - 134.799 - 599.842) / 4266.346
=-0.0661

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.

Cintas Corp has a M-score of -2.86 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 own currency.

Cintas Corp Annual Data

May05May06May07May08May09May10May11May12May13May14
DSRI 1.05011.07490.96280.99020.86761.07761.10290.97591.04560.972
GMI 0.99120.99521.00190.9991.03940.97310.99970.99651.02380.9844
AQI 0.99751.14851.03560.9741.01320.94851.00061.02640.99241.0114
SGI 1.091.10961.08911.06230.95860.93981.07421.07651.05231.0545
DEPI 1.00510.97880.97710.97551.11941.01151.05640.97830.97790.875
SGAI 1.03171.00421.0111.03531.0231.09080.98050.95280.96841.0111
LVGI 0.94421.30971.01930.95940.84931.00821.34111.05441.02621.0123
TATA -0.0339-0.0329-0.0199-0.0544-0.0799-0.0882-0.0216-0.0413-0.0546-0.0762
M-score -2.50-2.51-2.52-2.69-2.93-2.93-2.52-2.63-2.64-2.84

Cintas Corp Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
DSRI 1.0221.07831.04561.05551.02471.01630.9720.91660.95340.9223
GMI 1.01571.02321.02381.0251.01120.99810.98440.96830.96570.9693
AQI 1.02681.03830.99241.00510.98110.971.01140.92310.90221.0011
SGI 1.0481.04441.05231.05541.06021.05261.05451.04311.0281.0194
DEPI 0.98760.97990.97791.01450.97110.89290.8750.9050.95211.1467
SGAI 0.95120.96660.96840.97660.99280.991.01111.01230.99790.9867
LVGI 1.04671.06751.02621.03330.99270.98261.01231.00851.04411.0458
TATA -0.0502-0.0527-0.0546-0.052-0.0514-0.0539-0.0762-0.0881-0.0789-0.0661
M-score -2.64-2.61-2.64-2.61-2.65-2.69-2.84-2.99-2.94-2.86
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