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Educational Development Corp (NAS:EDUC)
Beneish M-Score
0.00 (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.

Educational Development Corp has a M-score of signals that the company is a manipulator.

During the past 13 years, the highest Beneish M-Score of Educational Development Corp was -1.27. The lowest was -10000000.00. And the median was -2.59.


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 Educational Development 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $3.76 Mil.
Revenue was 24.424 + 12.607 + 9.638 + 7.625 = $54.29 Mil.
Gross Profit was 17.038 + 8.029 + 6.064 + 4.833 = $35.96 Mil.
Total Current Assets was $22.63 Mil.
Total Assets was $26.03 Mil.
Property, Plant and Equipment(Net PPE) was $1.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $32.22 Mil.
Total Current Liabilities was $12.38 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 1.259 + 0.644 + 0.325 + 0.097 = $2.33 Mil.
Non Operating Income was -0.003 + -0.022 + -0.01 + 0.042 = $0.01 Mil.
Cash Flow from Operations was 8.485 + 0.845 + 0.083 + 0.067 = $9.48 Mil.
Accounts Receivable was $4.61 Mil.
Revenue was 10.937 + 6.808 + 7.178 + 5.889 = $30.81 Mil.
Gross Profit was 6.822 + 3.795 + 4.335 + 3.798 = $18.75 Mil.
Total Current Assets was $16.21 Mil.
Total Assets was $18.96 Mil.
Property, Plant and Equipment(Net PPE) was $2.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $17.32 Mil.
Total Current Liabilities was $6.46 Mil.
Long-Term Debt was $0.00 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)
=(3.758 / 54.294) / (4.609 / 30.812)
=0.06921575 / 0.14958458
=

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)
=(8.029 / 30.812) / (17.038 / 54.294)
=0.60852914 / 0.66239363
=

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 - (22.632 + 1.333) / 26.027) / (1 - (16.214 + 2.051) / 18.964)
=0.07922542 / 0.03685931
=

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
=54.294 / 30.812
=

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))
=(0 / (0 + 2.051)) / (0 / (0 + 1.333))
=0 / 0
=

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)
=(32.22 / 54.294) / (17.324 / 30.812)
=0.59343574 / 0.56224847
=

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)
=((0 + 12.378) / 26.027) / ((0 + 6.456) / 18.964)
=0.47558305 / 0.34043451
=

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
=(2.325 - 0.007 - 9.48) / 26.027
=-0.2752

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.

Educational Development Corp has a M-score of signals that the company is likely to 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.

Educational Development Corp Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
DSRI 1.10091.06820.94331.2931.04210.97921.20510.98580.85730.8221
GMI 1.01310.98830.98951.0121.01211.0161.04011.01740.98570.9818
AQI 0.54951.23360.80941.3611.35161.05131.33691.14260.65240.776
SGI 1.00440.98790.97190.96320.97530.95020.96440.97011.02391.2472
DEPI 0.95020.92081.03310.95190.96571.03941.03540.99210.97320.985
SGAI 0.98831.03061.00321.0150.98341.040.93421.04811.01621.03
LVGI 0.84550.74590.79411.24581.00251.06370.97361.17981.00271.2665
TATA 0.0503-0.0233-0.0182-0.09640.0711-0.09480.03030.0061-0.12110.0613
M-score -2.28-2.38-2.65-2.63-1.98-2.98-2.00-2.49-3.31-2.33

Educational Development Corp Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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