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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 -4.80. 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 (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $2.51 Mil.
Revenue was 16.95 + 24.424 + 12.607 + 9.638 = $63.62 Mil.
Gross Profit was 11.993 + 17.038 + 8.029 + 6.064 = $43.12 Mil.
Total Current Assets was $22.50 Mil.
Total Assets was $49.70 Mil.
Property, Plant and Equipment(Net PPE) was $26.71 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $39.81 Mil.
Total Current Liabilities was $18.78 Mil.
Long-Term Debt was $17.69 Mil.
Net Income was -0.108 + 1.259 + 0.644 + 0.325 = $2.12 Mil.
Non Operating Income was 0.267 + -0.003 + -0.022 + -0.01 = $0.23 Mil.
Cash Flow from Operations was -2.762 + 8.485 + 0.845 + 0.083 = $6.65 Mil.
Accounts Receivable was $3.08 Mil.
Revenue was 7.625 + 10.937 + 6.808 + 7.178 = $32.55 Mil.
Gross Profit was 4.833 + 6.822 + 3.795 + 4.335 = $19.79 Mil.
Total Current Assets was $15.27 Mil.
Total Assets was $18.01 Mil.
Property, Plant and Equipment(Net PPE) was $2.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General & Admin. Expense(SGA) was $18.40 Mil.
Total Current Liabilities was $5.69 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)
=(2.513 / 63.619) / (3.077 / 32.548)
=0.03950078 / 0.0945373
=

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)
=(19.785 / 32.548) / (43.124 / 63.619)
=0.60787145 / 0.67784781
=

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 - (22.503 + 26.71) / 49.695) / (1 - (15.266 + 2.073) / 18.013)
=0.00969916 / 0.03741742
=

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
=63.619 / 32.548
=

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 + 2.073)) / (0 / (0 + 26.71))
=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)
=(39.811 / 63.619) / (18.399 / 32.548)
=0.62577217 / 0.56528819
=

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)
=((17.687 + 18.778) / 49.695) / ((0 + 5.685) / 18.013)
=0.73377603 / 0.3156054
=

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
=(2.12 - 0.232 - 6.651) / 49.695
=-0.0958

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 -0.0233-0.0182-0.1140.0711-0.09480.03030.0061-0.12110.0613-0.1008
M-score -2.38-2.65-2.71-1.98-2.98-2.00-2.49-3.31-2.33-2.90

Educational Development Corp Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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