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Cintas Corp (NAS:CTAS)
Beneish M-Score
-2.23 (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 -2.23 suggests that the company is not a manipulator.

CTAS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.15   Max: -2.01
Current: -2.23

-3.15
-2.01

During the past 13 years, the highest Beneish M-Score of Cintas Corp was -2.01. The lowest was -3.15. 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 * 1.04+0.528 * 0.9934+0.404 * 0.8928+0.892 * 1.0634+0.115 * 1.1702
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9904+4.679 * 0.0401-0.327 * 1.0242
=-2.23

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $551 Mil.
Revenue was 1216.083 + 1219.08 + 1198.89 + 1142.583 = $4,777 Mil.
Gross Profit was 524.608 + 527.4 + 524.144 + 486.66 = $2,063 Mil.
Total Current Assets was $1,759 Mil.
Total Assets was $4,231 Mil.
Property, Plant and Equipment(Net PPE) was $965 Mil.
Depreciation, Depletion and Amortization(DDA) was $147 Mil.
Selling, General & Admin. Expense(SGA) was $1,306 Mil.
Total Current Liabilities was $859 Mil.
Long-Term Debt was $1,050 Mil.
Net Income was 117.341 + 345.1 + 100.181 + 105.215 = $668 Mil.
Non Operating Income was 0 + 0 + 0 + -1.667 = $-2 Mil.
Cash Flow from Operations was 32.117 + 121.954 + 143.083 + 202.63 = $500 Mil.
Accounts Receivable was $498 Mil.
Revenue was 1108.847 + 1123.379 + 1102.077 + 1157.479 = $4,492 Mil.
Gross Profit was 475.307 + 481.424 + 477.946 + 492.362 = $1,927 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 $156 Mil.
Selling, General & Admin. Expense(SGA) was $1,240 Mil.
Total Current Liabilities was $579 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)
=(550.748 / 4776.636) / (497.978 / 4491.782)
=0.11530039 / 0.11086424
=1.04

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)
=(1927.039 / 4491.782) / (2062.812 / 4776.636)
=0.42901436 / 0.43185455
=0.9934

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 - (1758.824 + 964.68) / 4231.21) / (1 - (1710.125 + 853.391) / 4266.346)
=0.35632975 / 0.39913078
=0.8928

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
=4776.636 / 4491.782
=1.0634

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))
=(156.499 / (156.499 + 853.391)) / (147.255 / (147.255 + 964.68))
=0.15496638 / 0.1324313
=1.1702

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)
=(1306.285 / 4776.636) / (1240.329 / 4491.782)
=0.27347384 / 0.27613295
=0.9904

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)
=((1050 + 858.804) / 4231.21) / ((1300 + 579.231) / 4266.346)
=0.45112486 / 0.44047787
=1.0242

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
=(667.837 - -1.667 - 499.784) / 4231.21
=0.0401

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 -2.23 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

May07May08May09May10May11May12May13May14May15May16
DSRI 0.96280.99020.86761.08971.09070.97591.04560.9720.99211.036
GMI 1.00190.9991.03940.97310.99970.99651.02380.98440.980.9884
AQI 1.03560.9741.01320.9461.00321.02760.99131.01140.93680.9795
SGI 1.08911.06230.95860.93981.07421.07651.05231.05450.98351.0957
DEPI 0.97710.97550.91651.23551.05640.97090.98530.8751.18240.9748
SGAI 1.0111.03531.0231.09080.98050.95280.96841.01110.9561.0044
LVGI 1.01930.95940.86220.99311.34111.05271.02791.01231.05910.9919
TATA -0.0322-0.0544-0.0799-0.0871-0.0216-0.0414-0.0546-0.0762-0.04210.0555
M-score -2.58-2.69-2.95-2.88-2.53-2.63-2.64-2.84-2.73-2.12

Cintas Corp Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1.0030.9720.92490.97050.94680.99211.07611.04051.041.036
GMI 0.99570.98440.96980.96870.97350.980.98770.99210.99340.9884
AQI 0.971.01140.92310.90221.00110.93680.96730.92220.89280.9795
SGI 1.06661.05451.03381.00990.9930.98351.00891.03461.06341.0957
DEPI 0.97010.8750.93310.95210.95381.18241.17811.08621.17020.9748
SGAI 0.99991.01111.00640.98670.96660.95630.95910.97320.99041.0041
LVGI 0.98261.01231.00851.04411.04581.05911.14691.06981.02420.9919
TATA -0.0539-0.0762-0.0881-0.0789-0.0661-0.0421-0.03710.02120.04010.0555
M-score -2.68-2.84-2.99-2.94-2.87-2.73-2.62-2.36-2.23-2.12
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