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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 0.00. 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 (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $2.99 Mil.
Revenue was 22.784 + 16.95 + 24.424 + 12.607 = $76.77 Mil.
Gross Profit was 16.11 + 11.993 + 17.038 + 8.029 = $53.17 Mil.
Total Current Assets was $29.73 Mil.
Total Assets was $57.88 Mil.
Property, Plant and Equipment(Net PPE) was $27.73 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $49.55 Mil.
Total Current Liabilities was $26.82 Mil.
Long-Term Debt was $17.54 Mil.
Net Income was 0.62 + -0.108 + 1.259 + 0.644 = $2.42 Mil.
Non Operating Income was 0.372 + 0.267 + -0.003 + -0.022 = $0.61 Mil.
Cash Flow from Operations was -1.107 + -2.762 + 8.485 + 0.845 = $5.46 Mil.
Accounts Receivable was $3.06 Mil.
Revenue was 9.638 + 7.625 + 10.937 + 6.808 = $35.01 Mil.
Gross Profit was 6.064 + 4.833 + 6.822 + 3.795 = $21.51 Mil.
Total Current Assets was $17.02 Mil.
Total Assets was $19.85 Mil.
Property, Plant and Equipment(Net PPE) was $2.16 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $19.97 Mil.
Total Current Liabilities was $7.48 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)
=(2.99 / 76.765) / (3.058 / 35.008)
=0.03895004 / 0.08735146
=

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)
=(21.514 / 35.008) / (53.17 / 76.765)
=0.61454525 / 0.69263336
=

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 - (29.732 + 27.732) / 57.882) / (1 - (17.017 + 2.159) / 19.854)
=0.00722159 / 0.03414929
=

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
=76.765 / 35.008
=

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 + 2.159)) / (0 / (0 + 27.732))
=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)
=(49.55 / 76.765) / (19.97 / 35.008)
=0.64547645 / 0.57044104
=

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)
=((17.538 + 26.816) / 57.882) / ((0 + 7.478) / 19.854)
=0.76628313 / 0.37664954
=

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
=(2.415 - 0.614 - 5.461) / 57.882
=-0.0632

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

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
DSRI 1.06820.94331.2931.04210.97921.20510.98580.85730.82210.4178
GMI 0.98830.98951.0121.01211.0161.04011.01740.98570.98180.8967
AQI 1.23360.80941.3611.35161.05131.33691.14260.65240.7760.2592
SGI 0.98790.97190.96320.97530.95020.96440.97011.02391.24721.9546
DEPI 0.92081.03310.95190.96571.03941.03540.99210.97320.9855.7486
SGAI 1.03061.00321.0150.98341.040.93421.04811.01621.031.1071
LVGI 0.74590.79411.24581.00251.06370.97361.17981.00271.26652.325
TATA -0.0233-0.0182-0.1140.0711-0.09480.03030.0061-0.12110.0583-0.1008
M-score -2.38-2.65-2.71-1.98-2.98-2.00-2.49-3.31-2.34-2.90

Educational Development Corp Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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