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Five Star Quality Care Inc (NAS:FVE)
Beneish M-Score
-3.23 (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.

Five Star Quality Care Inc has a M-score of -3.23 suggests that the company is not a manipulator.

FVE' s Beneish M-Score Range Over the Past 10 Years
Min: -5.17   Max: 0.54
Current: -3.23

-5.17
0.54

During the past 13 years, the highest Beneish M-Score of Five Star Quality Care Inc was 0.54. The lowest was -5.17. And the median was -2.76.


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 Five Star Quality Care 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 * 0.9235+0.528 * 1.0069+0.404 * 0.6492+0.892 * 1.0315+0.115 * 1.0422
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9781+4.679 * -0.115-0.327 * 1.1257
=-3.23

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $37 Mil.
Revenue was 344.212 + 344.596 + 344.572 + 342.269 = $1,376 Mil.
Gross Profit was 77.349 + 206.573 + 209.765 + 73.038 = $567 Mil.
Total Current Assets was $112 Mil.
Total Assets was $531 Mil.
Property, Plant and Equipment(Net PPE) was $384 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General & Admin. Expense(SGA) was $540 Mil.
Total Current Liabilities was $242 Mil.
Long-Term Debt was $60 Mil.
Net Income was -2.623 + -6.383 + -27.488 + -3.91 = $-40 Mil.
Non Operating Income was -0.109 + 0.122 + 0 + 0.71 = $1 Mil.
Cash Flow from Operations was -4.662 + 4.836 + 11.746 + 7.97 = $20 Mil.
Accounts Receivable was $39 Mil.
Revenue was 333.973 + 332.526 + 334.339 + 332.799 = $1,334 Mil.
Gross Profit was 72.218 + 199.028 + 208.632 + 73.308 = $553 Mil.
Total Current Assets was $122 Mil.
Total Assets was $531 Mil.
Property, Plant and Equipment(Net PPE) was $355 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General & Admin. Expense(SGA) was $535 Mil.
Total Current Liabilities was $220 Mil.
Long-Term Debt was $49 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)
=(37.398 / 1375.649) / (39.258 / 1333.637)
=0.02718571 / 0.0294368
=0.9235

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)
=(553.186 / 1333.637) / (566.725 / 1375.649)
=0.41479503 / 0.41196919
=1.0069

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 - (112.025 + 383.943) / 530.724) / (1 - (122.164 + 354.88) / 530.562)
=0.0654879 / 0.1008704
=0.6492

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
=1375.649 / 1333.637
=1.0315

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))
=(34.017 / (34.017 + 354.88)) / (35.176 / (35.176 + 383.943))
=0.08747046 / 0.08392843
=1.0422

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)
=(539.902 / 1375.649) / (535.119 / 1333.637)
=0.39247075 / 0.40124787
=0.9781

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)
=((59.929 + 242.341) / 530.724) / ((48.911 + 219.517) / 530.562)
=0.56954274 / 0.50593145
=1.1257

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
=(-40.404 - 0.723 - 19.89) / 530.724
=-0.115

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.

Five Star Quality Care Inc has a M-score of -3.23 suggests that the company will not 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.

Five Star Quality Care Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.34570.73760.98930.86131.01420.61570.90250.98151.0260.948
GMI 1.11193.15790.98891.00950.93580.35571.02261.0031.02911.01
AQI 0.76610.94942.20260.37071.15891.54390.94921.02060.6240.6438
SGI 1.09221.1761.13491.081.04041.03311.05390.961.02411.0281
DEPI 0.85950.85181.30530.91521.07491.22130.8630.9060.89061.0624
SGAI 0.76590.27271.05971.03261.01273.13320.97541.00531.00170.9795
LVGI 1.25680.92451.03930.82680.79820.97150.88770.98481.2431.1563
TATA 0.1762-0.0548-0.0799-0.0555-0.22550.0349-0.0494-0.0633-0.2021-0.1589
M-score -1.35-1.57-2.25-3.00-3.38-3.09-2.74-2.83-3.61-3.43

Five Star Quality Care Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.87760.83360.83960.91611.0261.01970.97361.03740.9480.9235
GMI 1.0711.05591.2431.21641.23121.51091.26521.27091.24921.0069
AQI 1.02061.07511.04491.08750.6240.58920.59660.36940.64380.6492
SGI 1.07371.04921.03421.02041.02411.02481.02471.02471.02811.0315
DEPI 0.88630.90640.9340.91010.89060.89880.89490.93751.06241.0422
SGAI 0.94170.96870.8220.84140.83440.66220.79380.78260.7840.9781
LVGI 0.98481.02371.14771.14481.2431.28071.21151.26631.15631.1257
TATA -0.0636-0.0946-0.121-0.0719-0.2021-0.2137-0.1831-0.2779-0.1589-0.115
M-score -2.78-2.99-3.04-2.76-3.47-3.38-3.41-3.89-3.27-3.23
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