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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 Monro Muffler Brake Inc was -0.12. The lowest was -3.17. 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 Monro Muffler Brake 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 * 0.9558||+||0.528 * 0.9641||+||0.404 * 1.1028||+||0.892 * 1.0661||+||0.115 * 1.055|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0003||+||4.679 * -0.0521||-||0.327 * 1.0718|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $3.2 Mil.|
Revenue was 236.553 + 221.299 + 217.507 + 203.244 = $878.6 Mil.
Gross Profit was 90.196 + 89.472 + 90.022 + 77.024 = $346.7 Mil.
Total Current Assets was $184.6 Mil.
Total Assets was $909.3 Mil.
Property, Plant and Equipment(Net PPE) was $316.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.1 Mil.
Selling, General & Admin. Expense(SGA) was $239.0 Mil.
Total Current Liabilities was $155.4 Mil.
Long-Term Debt was $274.3 Mil.
Net Income was 15.986 + 16.33 + 16.932 + 11.909 = $61.2 Mil.
Non Operating Income was -0.506 + 0.227 + 0.08 + 1.242 = $1.0 Mil.
Cash Flow from Operations was 33.94 + 20.57 + 34.106 + 18.91 = $107.5 Mil.
|Accounts Receivable was $3.2 Mil.
Revenue was 216.695 + 205.321 + 206.172 + 195.909 = $824.1 Mil.
Gross Profit was 82.324 + 81.748 + 78.878 + 70.574 = $313.5 Mil.
Total Current Assets was $173.0 Mil.
Total Assets was $761.4 Mil.
Property, Plant and Equipment(Net PPE) was $278.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $31.8 Mil.
Selling, General & Admin. Expense(SGA) was $224.1 Mil.
Total Current Liabilities was $142.5 Mil.
Long-Term Debt was $193.1 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)|
|=||(3.218 / 878.603)||/||(3.158 / 824.097)|
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)|
|=||(89.472 / 824.097)||/||(90.196 / 878.603)|
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 - (184.594 + 316.832) / 909.291)||/||(1 - (173.043 + 278.657) / 761.399)|
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))|
|=||(31.833 / (31.833 + 278.657))||/||(34.105 / (34.105 + 316.832))|
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)|
|=||(239.016 / 878.603)||/||(224.116 / 824.097)|
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)|
|=||((274.297 + 155.372) / 909.291)||/||((193.132 + 142.542) / 761.399)|
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|
|=||(61.157 - 1.043||-||107.526)||/||909.291|
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.
Monro Muffler Brake Inc has a M-score of -2.70 suggests that the company will not 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
Monro Muffler Brake Inc Annual Data
Monro Muffler Brake Inc Quarterly Data