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Ennis Inc (NYSE:EBF)
Beneish M-Score
-3.00 (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.

Ennis Inc has a M-score of -3.00 suggests that the company is not a manipulator.

EBF' s 10-Year Beneish M-Score Range
Min: -3.9   Max: -1.49
Current: -3

-3.9
-1.49

During the past 13 years, the highest Beneish M-Score of Ennis Inc was -1.49. The lowest was -3.90. And the median was -2.57.


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 Ennis Inc 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 * 1.0487+0.528 * 1.0031+0.404 * 0.9901+0.892 * 1.0314+0.115 * 0.9282
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0016+4.679 * -0.0758-0.327 * 1.6973
=-3.00

* 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 (Aug13) TTM:
Accounts Receivable was $63.9 Mil.
Revenue was 141.186 + 0 + 132.138 + 136.55 = $409.9 Mil.
Gross Profit was 35.388 + 0 + 33.58 + 37.759 = $106.7 Mil.
Total Current Assets was $222.4 Mil.
Total Assets was $541.9 Mil.
Property, Plant and Equipment(Net PPE) was $90.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.1 Mil.
Selling, General & Admin. Expense(SGA) was $65.2 Mil.
Total Current Liabilities was $42.6 Mil.
Long-Term Debt was $105.5 Mil.
Net Income was 8.032 + 0 + -14.467 + 9.349 = $2.9 Mil.
Non Operating Income was -0.343 + 0 + 0.045 + -0.253 = $-0.6 Mil.
Cash Flow from Operations was 13.312 + 38.571 + -5.816 + -1.533 = $44.5 Mil.
Accounts Receivable was $59.1 Mil.
Revenue was 135.288 + 138.466 + 0 + 123.638 = $397.4 Mil.
Gross Profit was 36.659 + 35.795 + 0 + 31.343 = $103.8 Mil.
Total Current Assets was $191.3 Mil.
Total Assets was $487.3 Mil.
Property, Plant and Equipment(Net PPE) was $87.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.6 Mil.
Selling, General & Admin. Expense(SGA) was $63.1 Mil.
Total Current Liabilities was $43.5 Mil.
Long-Term Debt was $35.0 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)
=(63.904 / 409.874) / (59.08 / 397.392)
=0.15591133 / 0.14866932
=1.0487

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)
=(0 / 397.392) / (35.388 / 409.874)
=0.26119549 / 0.26038978
=1.0031

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 - (222.41 + 90.228) / 541.891) / (1 - (191.282 + 87.784) / 487.279)
=0.4230611 / 0.4272973
=0.9901

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
=409.874 / 397.392
=1.0314

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))
=(19.577 / (19.577 + 87.784)) / (22.058 / (22.058 + 90.228))
=0.18234741 / 0.19644479
=0.9282

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)
=(65.184 / 409.874) / (63.097 / 397.392)
=0.15903424 / 0.15877773
=1.0016

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)
=((105.5 + 42.591) / 541.891) / ((35 + 43.457) / 487.279)
=0.27328559 / 0.16101043
=1.6973

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
=(2.914 - -0.551 - 44.534) / 541.891
=-0.0758

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.

Ennis Inc has a M-score of -3.00 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.

Ennis Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
DSRI 1.10870.58321.08521.46370.83131.12380.95961.07170.99021.0429
GMI 1.0640.9781.01770.99841.01760.93990.93041.11281.08480.8779
AQI 1.94550.99151.00160.94850.87411.0140.90030.96071.05761.0144
SGI 1.40871.53111.04531.04430.95650.88651.06230.941.03191.0167
DEPI 1.19660.62771.04611.06671.07981.25361.46850.93730.85190.945
SGAI 0.94280.89440.99321.02191.16131.0041.02651.00381.02791.0178
LVGI 1.80770.86640.85630.96110.99050.76960.9681.28620.771.3537
TATA 0.0046-0.0145-0.01680.0267-0.1773-0.10880.02540.0128-0.0505-0.0363
M-score -1.81-2.45-2.38-1.89-3.56-2.90-2.36-2.47-2.58-2.78

Ennis Inc Quarterly Data

Aug12Nov12Feb13Mar13May13Aug13Nov13Feb14Mar14May14
DSRI 1.76321.24441.0321.05071.3371.0487
GMI 1.20561.11480.88230.86690.86631.0031
AQI 1.03651.0571.02091.00851.08540.9901
SGI 0.76370.79280.97190.96960.76911.0314
DEPI 0.67470.63370.92030.9280.7150.9282
SGAI 1.05171.02161.00771.01771.01881.0016
LVGI 1.13660.76310.78710.80041.26081.6973
TATA -0.0769-0.1002-0.1243-0.1326-0.0922-0.0758
M-score -2.32-2.79-3.05-3.09-2.96-3.00
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