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Cintas Corp (NAS:CTAS)
Beneish M-Score
-1.20 (As of Today)

Warning Sign:

Beneish M-Score -1.2 higher than -2.22, which implies that it might have manipulated its financial results.

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 -1.20 signals that the company is a manipulator.

CTAS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12   Max: -1.2
Current: -1.2

-3.12
-1.2

During the past 13 years, the highest Beneish M-Score of Cintas Corp was -1.20. The lowest was -3.12. And the median was -2.61.


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 * 1.9433+0.528 * 0.9825+0.404 * 1.0206+0.892 * 1.0934+0.115 * 1.0511
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.013+4.679 * 0.0603-0.327 * 0.8644
=-1.20

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

This Year (Aug16) TTM:Last Year (Aug15) TTM:
Accounts Receivable was $1,128 Mil.
Revenue was 1294.13 + 1271.405 + 1216.083 + 1219.08 = $5,001 Mil.
Gross Profit was 583.774 + 553.718 + 524.608 + 527.4 = $2,190 Mil.
Total Current Assets was $1,595 Mil.
Total Assets was $4,167 Mil.
Property, Plant and Equipment(Net PPE) was $1,033 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General & Admin. Expense(SGA) was $1,384 Mil.
Total Current Liabilities was $711 Mil.
Long-Term Debt was $1,045 Mil.
Net Income was 138.091 + 130.898 + 117.341 + 345.1 = $731 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 157.588 + 168.691 + 32.117 + 121.954 = $480 Mil.
Accounts Receivable was $531 Mil.
Revenue was 1198.89 + 1142.583 + 1108.847 + 1123.379 = $4,574 Mil.
Gross Profit was 524.144 + 486.66 + 475.307 + 481.424 = $1,968 Mil.
Total Current Assets was $1,734 Mil.
Total Assets was $4,123 Mil.
Property, Plant and Equipment(Net PPE) was $897 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $1,249 Mil.
Total Current Liabilities was $959 Mil.
Long-Term Debt was $1,050 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)
=(1128.496 / 5000.698) / (531.127 / 4573.699)
=0.2256677 / 0.11612636
=1.9433

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)
=(1967.535 / 4573.699) / (2189.5 / 5000.698)
=0.43018463 / 0.43783888
=0.9825

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 - (1594.748 + 1033.16) / 4167.145) / (1 - (1733.952 + 896.786) / 4122.949)
=0.36937448 / 0.36192808
=1.0206

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
=5000.698 / 4573.699
=1.0934

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))
=(155.196 / (155.196 + 896.786)) / (168.679 / (168.679 + 1033.16))
=0.14752724 / 0.14035075
=1.0511

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)
=(1383.511 / 5000.698) / (1249.109 / 4573.699)
=0.27666358 / 0.27310695
=1.013

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)
=((1044.628 + 710.859) / 4167.145) / ((1050 + 959.326) / 4122.949)
=0.42126852 / 0.48735165
=0.8644

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
=(731.43 - 0 - 480.35) / 4167.145
=0.0603

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 -1.20 signals that the company is likely to 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.

Cintas Corp Annual Data

May07May08May09May10May11May12May13May14May15May16
DSRI 0.96280.99020.86761.07761.10290.97591.06291.03770.91411.036
GMI 1.00190.9991.03940.97310.99970.99651.02640.98970.97220.9884
AQI 1.03560.9741.01320.94851.00061.02640.99241.01140.93680.9795
SGI 1.08911.06230.95860.93981.07421.07651.03510.98771.06751.0957
DEPI 0.97710.97551.11941.01151.05640.97830.97790.78831.20711.0599
SGAI 1.0111.03531.0231.09080.98050.95280.95670.97811.00041.0044
LVGI 1.01930.95940.84931.00821.34111.05441.02621.01230.99721.0536
TATA -0.0322-0.0544-0.0799-0.0882-0.0216-0.0413-0.0546-0.0519-0.04090.0555
M-score -2.58-2.69-2.93-2.93-2.52-2.63-2.64-2.72-2.71-2.13

Cintas Corp Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 1.03770.97881.01820.98520.91410.99590.96720.97081.0361.9433
GMI 0.98970.97240.96930.97280.97220.98150.98730.98940.98840.9825
AQI 1.01140.92310.90221.00110.93680.96730.92220.89280.97951.0206
SGI 0.98770.97690.96250.95431.06751.09011.11311.13921.09571.0934
DEPI 0.78830.81050.81911.00851.20711.20961.21621.10911.05991.0511
SGAI 0.97810.9790.9630.95041.00041.00071.01481.02951.00441.013
LVGI 1.01231.00851.04411.04580.99721.14691.06981.02421.05360.8644
TATA -0.0519-0.0629-0.0544-0.0391-0.0409-0.03750.02080.03970.05550.0603
M-score -2.72-2.88-2.84-2.74-2.71-2.63-2.35-2.25-2.13-1.20
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