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Cintas Corp (NAS:CTAS)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

CTAS' s 10-Year Beneish M-Score Range
Min: -3.36   Max: -1.61
Current: -2.85

-3.36
-1.61

During the past 13 years, the highest Beneish M-Score of Cintas Corp was -1.61. The lowest was -3.36. And the median was -2.52.


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 * 0.9544+0.528 * 0.9844+0.404 * 1.0114+0.892 * 1.0545+0.115 * 0.875
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0111+4.679 * -0.0762-0.327 * 1.0123
=-2.85

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $508 Mil.
Revenue was 1157.479 + 1130.237 + 1143.753 + 1120.343 = $4,552 Mil.
Gross Profit was 492.362 + 479.125 + 476.919 + 465.98 = $1,914 Mil.
Total Current Assets was $1,806 Mil.
Total Assets was $4,462 Mil.
Property, Plant and Equipment(Net PPE) was $856 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $1,303 Mil.
Total Current Liabilities was $630 Mil.
Long-Term Debt was $1,300 Mil.
Net Income was 127.224 + 84.602 + 84.862 + 77.754 = $374 Mil.
Non Operating Income was 106.441 + 0 + 0 + 0 = $106 Mil.
Cash Flow from Operations was 222.196 + 163.493 + 139.721 + 82.559 = $608 Mil.
Accounts Receivable was $505 Mil.
Revenue was 1129.086 + 1075.674 + 1060.386 + 1051.325 = $4,316 Mil.
Gross Profit was 467.215 + 441.941 + 432.036 + 445.875 = $1,787 Mil.
Total Current Assets was $1,625 Mil.
Total Assets was $4,346 Mil.
Property, Plant and Equipment(Net PPE) was $987 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $1,222 Mil.
Total Current Liabilities was $556 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)
=(508.427 / 4551.812) / (505.151 / 4316.471)
=0.11169772 / 0.1170287
=0.9544

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)
=(479.125 / 4316.471) / (492.362 / 4551.812)
=0.41401112 / 0.42057668
=0.9844

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 - (1805.681 + 855.702) / 4462.452) / (1 - (1624.826 + 986.703) / 4345.632)
=0.40360524 / 0.39904506
=1.0114

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
=4551.812 / 4316.471
=1.0545

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))
=(165.664 / (165.664 + 986.703)) / (168.22 / (168.22 + 855.702))
=0.14375976 / 0.16428986
=0.875

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)
=(1302.752 / 4551.812) / (1221.856 / 4316.471)
=0.28620514 / 0.28306827
=1.0111

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)
=((1300.477 + 630.131) / 4462.452) / ((1300.979 + 556.256) / 4345.632)
=0.4326339 / 0.42737972
=1.0123

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
=(374.442 - 106.441 - 607.969) / 4462.452
=-0.0762

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 -2.85 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 1.05011.07490.96280.99021.74320.56562.08741.00410.51850.9544
GMI 0.99120.99521.00190.9991.03940.97310.99970.99651.02380.9844
AQI 0.99751.14851.03560.9741.01320.9461.00321.02760.99131.0114
SGI 1.091.10961.08911.06230.95860.93981.07421.07651.05231.0545
DEPI 1.00510.97880.97710.97550.91651.23551.05640.97090.98530.875
SGAI 1.02161.00991.01531.03531.0231.09080.98050.95280.96841.0111
LVGI 0.94421.31131.0180.95940.86220.99311.34111.05271.02791.0123
TATA -0.0314-0.032-0.0199-0.0426-0.0799-0.0871-0.0216-0.0414-0.0546-0.0762
M-score -2.49-2.51-2.52-2.64-2.15-3.36-1.62-2.60-3.13-2.85

Cintas Corp Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 1.03611.00410.51351.06260.53620.51851.05060.49550.97280.9544
GMI 0.98990.99651.00441.01571.02321.02381.02411.00950.99570.9844
AQI 0.92091.02760.981.02681.03830.99131.00510.98110.971.0114
SGI 1.09511.07651.05961.0481.04441.05231.06031.06981.06661.0545
DEPI 0.97980.97090.97310.98760.97990.98530.95260.97110.97010.875
SGAI 0.95150.95280.9510.95120.96660.96840.97950.99850.99991.0111
LVGI 1.33131.05271.00291.04671.06751.02791.03330.99270.98261.0123
TATA -0.0355-0.0414-0.0488-0.0502-0.0527-0.0546-0.052-0.0514-0.0539-0.0762
M-score -2.67-2.60-3.10-2.60-3.10-3.13-2.62-3.13-2.71-2.85
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