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Cintas Corp (NAS:CTAS)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

CTAS' s 10-Year Beneish M-Score Range
Min: -2.93   Max: -2.01
Current: -2.79

-2.93
-2.01

During the past 13 years, the highest Beneish M-Score of Cintas Corp was -2.01. The lowest was -2.93. And the median was -2.56.


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 * 0.9742+0.528 * 0.9768+0.404 * 0.9368+0.892 * 1.0016+0.115 * 1.1824
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9672+4.679 * -0.0556-0.327 * 1.0591
=-2.79

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $496 Mil.
Revenue was 1142.583 + 1108.847 + 1123.379 + 1102.077 = $4,477 Mil.
Gross Profit was 486.66 + 475.307 + 481.424 + 477.946 = $1,921 Mil.
Total Current Assets was $1,736 Mil.
Total Assets was $4,192 Mil.
Property, Plant and Equipment(Net PPE) was $871 Mil.
Depreciation, Depletion and Amortization(DDA) was $141 Mil.
Selling, General & Admin. Expense(SGA) was $1,225 Mil.
Total Current Liabilities was $621 Mil.
Long-Term Debt was $1,300 Mil.
Net Income was 105.215 + 94.883 + 120.412 + 110.108 = $431 Mil.
Non Operating Income was 55.049 + 0 + 0 + 28.358 = $83 Mil.
Cash Flow from Operations was 202.63 + 85.073 + 144.372 + 148.201 = $580 Mil.
Accounts Receivable was $508 Mil.
Revenue was 1134.415 + 1110.973 + 1123.931 + 1100.246 = $4,470 Mil.
Gross Profit was 480.846 + 469.634 + 467.079 + 456.095 = $1,874 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 $1,265 Mil.
Total Current Liabilities was $630 Mil.
Long-Term Debt was $1,300 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)
=(496.13 / 4476.886) / (508.427 / 4469.565)
=0.11082033 / 0.11375313
=0.9742

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)
=(475.307 / 4469.565) / (486.66 / 4476.886)
=0.41920276 / 0.42916818
=0.9768

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 - (1735.807 + 871.421) / 4192.46) / (1 - (1805.681 + 855.702) / 4462.452)
=0.378115 / 0.40360524
=0.9368

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
=4476.886 / 4469.565
=1.0016

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))
=(168.22 / (168.22 + 855.702)) / (140.624 / (140.624 + 871.421))
=0.16428986 / 0.13895034
=1.1824

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)
=(1225.338 / 4476.886) / (1264.836 / 4469.565)
=0.27370319 / 0.28298861
=0.9672

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 + 621.058) / 4192.46) / ((1300.477 + 630.131) / 4462.452)
=0.45821737 / 0.4326339
=1.0591

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
=(430.618 - 83.407 - 580.276) / 4192.46
=-0.0556

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 -2.79 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

May06May07May08May09May10May11May12May13May14May15
DSRI 1.07490.96280.99020.86761.07761.10290.97591.04560.98980.9742
GMI 0.99521.00190.9991.03940.97310.99970.99651.02380.98760.9768
AQI 1.14851.03560.9741.01320.94851.00061.02640.99241.01140.9368
SGI 1.10961.08911.06230.95860.93981.07421.07651.05231.03551.0016
DEPI 0.97880.97710.97551.11941.01151.05640.97830.97790.8751.1824
SGAI 1.00421.0111.03531.0231.09080.98050.95280.96840.99970.9669
LVGI 1.30971.01930.95940.84931.00821.34111.05441.02621.01231.0591
TATA -0.0329-0.0199-0.0544-0.0799-0.0882-0.0216-0.0413-0.0546-0.0757-0.0421
M-score -2.51-2.52-2.69-2.93-2.93-2.52-2.63-2.64-2.83-2.73

Cintas Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.07831.04561.05551.02471.01630.98980.93350.97090.93920.9742
GMI 1.02321.02381.0251.01120.99810.98760.97120.96850.9720.9768
AQI 1.03830.99241.00510.98110.971.01140.92310.90221.00110.9368
SGI 1.04441.05231.05541.06021.05261.03551.02431.00951.0011.0016
DEPI 0.97990.97791.01450.97110.89290.8750.9050.95211.14671.1824
SGAI 0.96660.96840.97660.99280.990.99971.00090.98630.97480.9672
LVGI 1.06751.02621.03330.99270.98261.01231.00851.04411.04581.0591
TATA -0.0527-0.0546-0.052-0.0514-0.0539-0.0757-0.0877-0.0785-0.0656-0.0556
M-score -2.61-2.64-2.61-2.65-2.69-2.83-2.99-2.94-2.85-2.79
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