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Cintas Corporation (NAS:CTAS)
Beneish M-Score
-3.13 (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 Corporation has a M-score of -2.58 suggests that the company is not a manipulator.

CTAS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -1.91
Current: -3.13

-3.27
-1.91

During the past 13 years, the highest Beneish M-Score of Cintas Corporation was -1.91. The lowest was -3.27. And the median was -2.54.


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 Corporation 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 * 0.7312+0.528 * 0.9914+0.404 * 0.97+0.892 * 1.4192+0.115 * 1.3363
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0022+4.679 * -0.0539-0.327 * 0.9826
=-2.58

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

This Year (Feb14) TTM:Last Year (Feb13) TTM:
Accounts Receivable was $530 Mil.
Revenue was 1130.237 + 1143.753 + 1120.343 + 1129.086 = $4,523 Mil.
Gross Profit was 479.125 + 476.919 + 465.98 + 467.215 = $1,889 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 $170 Mil.
Selling, General & Admin. Expense(SGA) was $1,292 Mil.
Total Current Liabilities was $553 Mil.
Long-Term Debt was $1,301 Mil.
Net Income was 84.602 + 84.862 + 77.754 + 85.977 = $333 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 163.493 + 139.721 + 82.559 + 184.405 = $570 Mil.
Accounts Receivable was $510 Mil.
Revenue was 1075.674 + 1060.386 + 1051.325 + 0 = $3,187 Mil.
Gross Profit was 441.941 + 432.036 + 445.875 + 0 = $1,320 Mil.
Total Current Assets was $1,509 Mil.
Total Assets was $4,221 Mil.
Property, Plant and Equipment(Net PPE) was $977 Mil.
Depreciation, Depletion and Amortization(DDA) was $240 Mil.
Selling, General & Admin. Expense(SGA) was $909 Mil.
Total Current Liabilities was $501 Mil.
Long-Term Debt was $1,309 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)
=(529.668 / 4523.419) / (510.455 / 3187.385)
=0.11709461 / 0.16014852
=0.7312

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)
=(476.919 / 3187.385) / (479.125 / 4523.419)
=0.41408616 / 0.41765731
=0.9914

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 - (1664.909 + 981.197) / 4400.441) / (1 - (1509.452 + 976.844) / 4221.299)
=0.39867254 / 0.41101163
=0.97

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
=4523.419 / 3187.385
=1.4192

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))
=(240.429 / (240.429 + 976.844)) / (170.183 / (170.183 + 981.197))
=0.19751444 / 0.14780785
=1.3363

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)
=(1292.164 / 4523.419) / (908.512 / 3187.385)
=0.28566091 / 0.28503366
=1.0022

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)
=((1300.523 + 552.802) / 4400.441) / ((1308.656 + 500.752) / 4221.299)
=0.42116801 / 0.42863773
=0.9826

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
=(333.195 - 0 - 570.178) / 4400.441
=-0.0539

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 Corporation has a M-score of -2.58 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 Corporation Annual Data

May04May05May06May07May08May09May10May11May12May13
DSRI 0.98031.05011.07490.96281.8430.49941.97171.1231.00410.5185
GMI 0.9880.99120.99521.00190.9991.03940.97310.99970.99651.0238
AQI 0.98130.99751.14851.03560.9741.01320.94851.00061.02760.9913
SGI 1.04741.091.10961.08911.06230.95860.93981.07421.07651.0523
DEPI 1.00741.00510.97880.97710.97551.11941.01151.05640.97090.9853
SGAI 0.99891.03171.00421.0111.03531.0231.09080.98050.95280.9684
LVGI 0.87510.94421.30971.01930.95940.84931.00821.34111.05271.0279
TATA -0.083-0.0339-0.0329-0.0199-0.0544-0.0799-0.0882-0.0216-0.0414-0.0546
M-score -2.82-2.50-2.51-2.52-1.91-3.27-2.10-2.50-2.60-3.13

Cintas Corporation Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
DSRI 1.02921.03611.3831.4210.71340.39010.37050.7312
GMI 0.99110.98991.00391.01811.02761.02471.00710.9914
AQI 0.95160.92090.981.02681.03831.00510.98110.97
SGI 1.09761.09510.78970.78370.7851.42271.43061.4192
DEPI 0.99970.97980.69960.71280.71141.3251.34551.3363
SGAI 0.95130.95150.95250.94840.96440.9781.00141.0022
LVGI 1.32261.33131.00291.04671.06751.03330.99270.9826
TATA -0.032-0.0355-0.1101-0.1106-0.113-0.052-0.0514-0.0539
M-score -2.64-2.67-2.86-2.82-3.48-2.86-2.88-2.58
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