Switch to:
CarMax Inc (NYSE:KMX)
Beneish M-Score
-1.69 (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.

CarMax Inc has a M-score of -1.69 signals that the company is a manipulator.

KMX' s 10-Year Beneish M-Score Range
Min: -3.48   Max: 3.15
Current: -1.69

-3.48
3.15

During the past 13 years, the highest Beneish M-Score of CarMax Inc was 3.15. The lowest was -3.48. And the median was -2.35.


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 CarMax 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 * 1.1552+0.528 * 1.0208+0.404 * 1.0376+0.892 * 1.1221+0.115 * 1.0068
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9721+4.679 * 0.1137-0.327 * 1.0661
=-1.69

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $88 Mil.
Revenue was 3405.234 + 3599.194 + 3750.196 + 3076.283 = $13,831 Mil.
Gross Profit was 446.62 + 463.339 + 501.731 + 384.141 = $1,796 Mil.
Total Current Assets was $2,573 Mil.
Total Assets was $12,843 Mil.
Property, Plant and Equipment(Net PPE) was $1,834 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $1,225 Mil.
Total Current Liabilities was $928 Mil.
Long-Term Debt was $8,550 Mil.
Net Income was 130.049 + 154.518 + 169.653 + 99.209 = $553 Mil.
Non Operating Income was -1.536 + -0.283 + 0.277 + -0.254 = $-2 Mil.
Cash Flow from Operations was -347.996 + -227.539 + -209.08 + -120.023 = $-905 Mil.
Accounts Receivable was $68 Mil.
Revenue was 2941.407 + 3245.552 + 3311.057 + 2827.948 = $12,326 Mil.
Gross Profit was 381.721 + 434.743 + 448.096 + 369.235 = $1,634 Mil.
Total Current Assets was $2,559 Mil.
Total Assets was $11,304 Mil.
Property, Plant and Equipment(Net PPE) was $1,589 Mil.
Depreciation, Depletion and Amortization(DDA) was $99 Mil.
Selling, General & Admin. Expense(SGA) was $1,123 Mil.
Total Current Liabilities was $749 Mil.
Long-Term Debt was $7,076 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)
=(88.18 / 13830.907) / (68.027 / 12325.964)
=0.00637558 / 0.005519
=1.1552

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)
=(463.339 / 12325.964) / (446.62 / 13830.907)
=0.13254906 / 0.12984188
=1.0208

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 - (2573.252 + 1833.6) / 12843.406) / (1 - (2558.794 + 1588.633) / 11303.875)
=0.65687825 / 0.63309688
=1.0376

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
=13830.907 / 12325.964
=1.1221

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))
=(98.545 / (98.545 + 1588.633)) / (112.922 / (112.922 + 1833.6))
=0.05840818 / 0.05801219
=1.0068

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)
=(1225.17 / 13830.907) / (1123.236 / 12325.964)
=0.08858204 / 0.09112764
=0.9721

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)
=((8550.397 + 928.182) / 12843.406) / ((7076.325 + 748.601) / 11303.875)
=0.73801132 / 0.69223395
=1.0661

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
=(553.429 - -1.796 - -904.638) / 12843.406
=0.1137

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.

CarMax Inc has a M-score of -1.69 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.

CarMax Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
DSRI 0.92010.84530.78150.93361.21831.22341.00110.64840.97090.7577
GMI 1.00460.97860.97110.99450.94210.94381.01471.05191.03181.0188
AQI 0.76842.69980.97141.10471.32070.646115.8510.94650.99651.0179
SGI 1.14411.191.19261.09830.85051.07121.20151.11451.09591.147
DEPI 1.28890.93091.00810.98170.93010.89950.81.25940.9731.0764
SGAI 1.021.00240.99821.00691.20860.86620.89340.960510.9769
LVGI 1.08340.9320.87721.0620.91450.70243.27111.02391.02361.0367
TATA -0.0094-0.0489-0.03760.0068-0.08630.09050.05610.05710.12250.0946
M-score -2.56-1.99-2.67-2.41-2.73-1.853.22-2.40-1.84-2.11

CarMax Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 1.01941.05930.97090.94161.04060.93460.75771.22681.14111.1552
GMI 1.03831.03041.03181.02491.01681.01911.01881.01751.0291.0208
AQI 0.94430.95310.99651.00531.00891.01481.01791.02611.03631.0376
SGI 1.06531.08491.09591.13871.16731.16171.1471.13171.11511.1221
DEPI 1.30491.39870.9730.98721.04151.05651.07641.07711.02971.0068
SGAI 1.02131.028310.98410.96060.95830.97690.97540.97590.9721
LVGI 1.02311.03161.02361.05061.06211.05031.03671.0331.0331.0661
TATA 0.06830.09830.11490.11480.11390.11270.09460.10390.10620.1137
M-score -2.06-1.86-1.88-1.87-1.76-1.86-2.11-1.65-1.72-1.69
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK