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Beneish M-Score -0.53 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of FirstCash Inc was 4.70. The lowest was -4.33. And the median was -2.59.
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 FirstCash 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 * 2.8657||+||0.528 * 1.0069||+||0.404 * 1.1091||+||0.892 * 1.1422||+||0.115 * 1.7252|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0661||+||4.679 * -0.0186||-||0.327 * 0.7618|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $483.1 Mil.|
Revenue was 261.153 + 181.979 + 183.203 + 191.424 = $817.8 Mil.
Gross Profit was 147.364 + 101.461 + 101.863 + 102.925 = $453.6 Mil.
Total Current Assets was $986.1 Mil.
Total Assets was $2,277.7 Mil.
Property, Plant and Equipment(Net PPE) was $240.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.5 Mil.
Selling, General & Admin. Expense(SGA) was $317.4 Mil.
Total Current Liabilities was $168.5 Mil.
Long-Term Debt was $556.4 Mil.
Net Income was -1.412 + 11.673 + 13.174 + 19.41 = $42.8 Mil.
Non Operating Income was 4.935 + 4.102 + 4.186 + 3.982 = $17.2 Mil.
Cash Flow from Operations was 0.901 + 14.497 + 25.076 + 27.627 = $68.1 Mil.
|Accounts Receivable was $147.6 Mil.
Revenue was 169.532 + 167.623 + 176.023 + 202.774 = $716.0 Mil.
Gross Profit was 95.442 + 94.046 + 98.771 + 111.633 = $399.9 Mil.
Total Current Assets was $330.8 Mil.
Total Assets was $755.2 Mil.
Property, Plant and Equipment(Net PPE) was $110.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.1 Mil.
Selling, General & Admin. Expense(SGA) was $260.7 Mil.
Total Current Liabilities was $47.0 Mil.
Long-Term Debt was $268.5 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(483.118 / 817.759)||/||(147.6 / 715.952)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(399.892 / 715.952)||/||(453.613 / 817.759)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (986.057 + 240.749) / 2277.695)||/||(1 - (330.758 + 110.285) / 755.202)|
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.
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))|
|=||(18.126 / (18.126 + 110.285))||/||(21.453 / (21.453 + 240.749))|
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)|
|=||(317.443 / 817.759)||/||(260.695 / 715.952)|
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)|
|=||((556.373 + 168.498) / 2277.695)||/||((268.5 + 46.972) / 755.202)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(42.845 - 17.205||-||68.101)||/||2277.695|
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.
FirstCash Inc has a M-score of -0.53 signals that the company is likely to be a manipulator.
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
FirstCash Inc Annual Data
FirstCash Inc Quarterly Data