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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.

EDUC' s 10-Year Beneish M-Score Range
Min: -10000000   Max: -1.27
Current: 0

-10000000
-1.27

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 (May15) TTM:Last Year (May14) TTM:
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.
Net Income was 0.325 + 0.097 + 0.526 + -0.004 = $0.94 Mil.
Non Operating Income was -0.01 + 0.042 + -0.019 + -0.011 = $0.00 Mil.
Cash Flow from Operations was 0.083 + 0.067 + 2.101 + -1.945 = $0.31 Mil.
Accounts Receivable was $3.52 Mil.
Revenue was 7.178 + 5.889 + 8.502 + 5.715 = $27.28 Mil.
Gross Profit was 4.335 + 3.798 + 5.208 + 3.054 = $16.40 Mil.
Total Current Assets was $15.24 Mil.
Total Assets was $17.88 Mil.
Property, Plant and Equipment(Net PPE) was $1.93 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $14.86 Mil.
Total Current Liabilities was $5.34 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)
=(3.058 / 35.008) / (3.515 / 27.284)
=0.08735146 / 0.12883008
=

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)
=(4.833 / 27.284) / (6.064 / 35.008)
=0.60090163 / 0.61454525
=

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 - (17.017 + 2.159) / 19.854) / (1 - (15.241 + 1.934) / 17.882)
=0.03414929 / 0.03953696
=

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
=35.008 / 27.284
=

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 + 1.934)) / (0 / (0 + 2.159))
=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)
=(19.97 / 35.008) / (14.859 / 27.284)
=0.57044104 / 0.5446049
=

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 + 7.478) / 19.854) / ((0 + 5.341) / 17.882)
=0.37664954 / 0.29868024
=

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
=(0.944 - 0.002 - 0.306) / 19.854
=0.032

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 0.0503-0.0233-0.0182-0.09640.084-0.09480.03030.0061-0.12110.0613
M-score -2.28-2.38-2.65-2.63-1.92-2.98-2.00-2.49-3.31-2.33

Educational Development Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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