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Five Star Quality Care Inc (NYSE:FVE)
Beneish M-Score
-3.70 (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 -3.70 suggests that the company is not a manipulator.

FVE' s 10-Year Beneish M-Score Range
Min: -5.16   Max: 0.79
Current: -3.7

-5.16
0.79

During the past 13 years, the highest Beneish M-Score of Five Star Quality Care Inc was 0.79. The lowest was -5.16. And the median was -2.64.


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 * 1.0196+0.528 * 1.0176+0.404 * 0.5892+0.892 * 1.025+0.115 * 0.8988
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9928+4.679 * -0.2137-0.327 * 1.2807
=-3.70

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $39 Mil.
Revenue was 333.973 + 332.526 + 334.339 + 332.799 = $1,334 Mil.
Gross Profit was 205.471 + 199.028 + 208.632 + 207.487 = $821 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 $803 Mil.
Total Current Liabilities was $220 Mil.
Long-Term Debt was $49 Mil.
Net Income was -5.302 + -73.748 + -3.008 + -1.891 = $-84 Mil.
Non Operating Income was 0.02 + 0.043 + 0.023 + 0.013 = $0 Mil.
Cash Flow from Operations was 15.988 + -5.946 + -6.741 + 26.042 = $29 Mil.
Accounts Receivable was $38 Mil.
Revenue was 328.411 + 325.225 + 324.263 + 323.261 = $1,301 Mil.
Gross Profit was 201.389 + 203.853 + 204.115 + 205.356 = $815 Mil.
Total Current Assets was $133 Mil.
Total Assets was $570 Mil.
Property, Plant and Equipment(Net PPE) was $339 Mil.
Depreciation, Depletion and Amortization(DDA) was $29 Mil.
Selling, General & Admin. Expense(SGA) was $789 Mil.
Total Current Liabilities was $189 Mil.
Long-Term Debt was $36 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)
=(39.258 / 1333.637) / (37.566 / 1301.16)
=0.0294368 / 0.02887116
=1.0196

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)
=(199.028 / 1301.16) / (205.471 / 1333.637)
=0.62614359 / 0.61532336
=1.0176

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 - (122.164 + 354.88) / 530.562) / (1 - (133.493 + 339.222) / 570.364)
=0.1008704 / 0.1712047
=0.5892

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
=1333.637 / 1301.16
=1.025

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))
=(29.287 / (29.287 + 339.222)) / (34.423 / (34.423 + 354.88))
=0.07947431 / 0.08842213
=0.8988

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)
=(802.551 / 1333.637) / (788.697 / 1301.16)
=0.6017762 / 0.60614913
=0.9928

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)
=((48.911 + 219.517) / 530.562) / ((36.16 + 189.161) / 570.364)
=0.50593145 / 0.39504772
=1.2807

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
=(-83.949 - 0.099 - 29.343) / 530.562
=-0.2137

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 -3.70 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02241.32280.72710.9940.87251.24730.59470.83490.87761.026
GMI 1.01773.2271.02090.9841.00170.28611.02621.09991.07111.0289
AQI 0.92370.76610.94942.20260.37071.15891.54390.94921.02060.624
SGI 1.22781.11111.19291.12961.06620.8461.06961.13921.07371.0241
DEPI 0.49950.86740.8441.30530.91951.26191.13540.80450.88630.8906
SGAI 0.96930.50240.51341.06421.03933.69630.97750.90470.94171.0017
LVGI 1.23151.25680.92451.03930.82680.79820.97150.88770.98481.243
TATA 0.26790.1706-0.0548-0.06740.1119-0.22150.044-0.0422-0.0636-0.2021
M-score -1.15-0.22-2.73-2.20-2.23-4.11-2.32-2.64-2.78-3.61

Five Star Quality Care Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.86550.57610.59310.56740.87790.83350.83930.91581.02561.0196
GMI 0.88410.92241.14861.18241.07311.0561.0371.01591.0271.0176
AQI 0.94921.02820.89340.93161.02061.07511.04491.08750.6240.5892
SGI 1.09891.14531.18691.22771.07331.04921.03461.02071.02451.025
DEPI 0.80450.7850.84640.87390.88630.88540.9340.91010.89060.8988
SGAI 1.13971.08830.86840.8490.94160.96950.98921.01061.00180.9928
LVGI 0.88770.85290.83930.95150.98481.02371.14771.14481.2431.2807
TATA -0.0422-0.0332-0.0196-0.0869-0.065-0.0957-0.121-0.0719-0.2021-0.2137
M-score -2.80-2.92-2.69-2.99-2.78-2.99-3.18-2.89-3.61-3.70
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