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Five Star Quality Care Inc (NAS:FVE)
Beneish M-Score
-2.68 (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 -2.68 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: -2.68

-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 * 0.9847+0.528 * 0.9925+0.404 * 0.8749+0.892 * 1.0171+0.115 * 0.897
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9995+4.679 * -0.0392-0.327 * 0.8578
=-2.68

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $38 Mil.
Revenue was 344.711 + 342.933 + 344.212 + 344.596 = $1,376 Mil.
Gross Profit was 209.856 + 74.012 + 77.349 + 206.573 = $568 Mil.
Total Current Assets was $148 Mil.
Total Assets was $531 Mil.
Property, Plant and Equipment(Net PPE) was $353 Mil.
Depreciation, Depletion and Amortization(DDA) was $38 Mil.
Selling, General & Admin. Expense(SGA) was $545 Mil.
Total Current Liabilities was $187 Mil.
Long-Term Debt was $59 Mil.
Net Income was -5.897 + -7.666 + -2.623 + -6.383 = $-23 Mil.
Non Operating Income was 0.012 + 0.344 + -0.109 + 0.122 = $0 Mil.
Cash Flow from Operations was -4.041 + 1.724 + -4.662 + 4.836 = $-2 Mil.
Accounts Receivable was $38 Mil.
Revenue was 344.572 + 342.269 + 333.973 + 332.526 = $1,353 Mil.
Gross Profit was 209.765 + 73.038 + 72.218 + 199.028 = $554 Mil.
Total Current Assets was $120 Mil.
Total Assets was $507 Mil.
Property, Plant and Equipment(Net PPE) was $355 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General & Admin. Expense(SGA) was $536 Mil.
Total Current Liabilities was $231 Mil.
Long-Term Debt was $43 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)
=(38.04 / 1376.452) / (37.983 / 1353.34)
=0.02763627 / 0.02806612
=0.9847

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)
=(554.049 / 1353.34) / (567.79 / 1376.452)
=0.4093938 / 0.41250258
=0.9925

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 - (147.846 + 352.561) / 530.676) / (1 - (119.687 + 354.514) / 507.272)
=0.05703857 / 0.06519382
=0.8749

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
=1376.452 / 1353.34
=1.0171

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))
=(33.794 / (33.794 + 354.514)) / (37.882 / (37.882 + 352.561))
=0.08702885 / 0.09702313
=0.897

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)
=(544.661 / 1376.452) / (535.777 / 1353.34)
=0.39569923 / 0.39589238
=0.9995

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)
=((58.978 + 186.909) / 530.676) / ((42.924 + 231.071) / 507.272)
=0.46334675 / 0.54013429
=0.8578

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
=(-22.569 - 0.369 - -2.143) / 530.676
=-0.0392

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 -2.68 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 local exchange's currency.

Five Star Quality Care Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.32280.72710.9940.87251.24730.59440.83520.87761.0260.948
GMI 3.2271.02090.9841.00170.28611.02541.10091.0711.02891.01
AQI 0.76610.94942.20260.37071.15891.54390.94921.02060.6240.6438
SGI 1.11111.19291.12961.06620.8461.071.13881.07371.02411.0281
DEPI 0.86740.8441.30530.91951.26191.13540.80450.88630.89061.0624
SGAI 0.50240.51341.06421.03933.69630.97720.90490.94171.00170.9795
LVGI 1.25680.92451.03930.82680.79820.97150.88770.98481.2431.1563
TATA 0.1772-0.0548-0.0799-0.0555-0.22150.0464-0.0424-0.0636-0.2021-0.1589
M-score -0.19-2.73-2.26-3.01-4.11-2.31-2.64-2.78-3.61-3.43

Five Star Quality Care Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.83960.91611.0261.01970.97361.03740.9480.92350.93560.9847
GMI 1.2431.21641.23121.51091.26521.27091.24921.00690.9980.9925
AQI 1.04491.08750.6240.58920.59660.36940.64380.64920.56840.8749
SGI 1.03421.02041.02411.02481.02471.02471.02811.03151.02471.0171
DEPI 0.9340.91010.89060.89880.90160.94781.06241.04220.91280.897
SGAI 0.8220.84140.83440.66220.79380.78260.7840.97810.98050.9995
LVGI 1.14771.14481.2431.28071.21151.26631.15631.12570.9070.8578
TATA -0.121-0.0719-0.2021-0.2137-0.1831-0.2779-0.1589-0.115-0.1053-0.0392
M-score -3.04-2.76-3.47-3.38-3.41-3.89-3.27-3.23-3.16-2.68
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