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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.
Monro Muffler Brake Inc has a M-score of -2.75 suggests that the company is not a 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 -2.58.
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 * 0.8548||+||0.528 * 0.9562||+||0.404 * 1.0553||+||0.892 * 1.0959||+||0.115 * 0.9617|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9886||+||4.679 * -0.0476||-||0.327 * 0.9843|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $2.8 Mil.|
Revenue was 217.507 + 203.244 + 216.695 + 205.321 = $842.8 Mil.
Gross Profit was 90.022 + 77.024 + 82.324 + 81.748 = $331.1 Mil.
Total Current Assets was $168.6 Mil.
Total Assets was $777.6 Mil.
Property, Plant and Equipment(Net PPE) was $290.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $32.3 Mil.
Selling, General & Admin. Expense(SGA) was $229.5 Mil.
Total Current Liabilities was $142.2 Mil.
Long-Term Debt was $184.4 Mil.
Net Income was 16.932 + 11.908 + 15.329 + 13.65 = $57.8 Mil.
Non Operating Income was 0.08 + 0.076 + 0.352 + -0.179 = $0.3 Mil.
Cash Flow from Operations was 34.106 + 18.91 + 28.113 + 13.387 = $94.5 Mil.
|Accounts Receivable was $3.0 Mil.
Revenue was 206.172 + 195.909 + 190.437 + 176.475 = $769.0 Mil.
Gross Profit was 78.878 + 70.574 + 69.61 + 69.851 = $288.9 Mil.
Total Current Assets was $159.7 Mil.
Total Assets was $703.6 Mil.
Property, Plant and Equipment(Net PPE) was $271.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.8 Mil.
Selling, General & Admin. Expense(SGA) was $211.8 Mil.
Total Current Liabilities was $139.0 Mil.
Long-Term Debt was $161.1 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)|
|=||(2.774 / 842.767)||/||(2.961 / 768.993)|
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)|
|=||(77.024 / 768.993)||/||(90.022 / 842.767)|
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 - (168.602 + 290.77) / 777.638)||/||(1 - (159.743 + 270.983) / 703.613)|
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))|
|=||(28.844 / (28.844 + 270.983))||/||(32.318 / (32.318 + 290.77))|
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)|
|=||(229.469 / 842.767)||/||(211.789 / 768.993)|
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)|
|=||((184.38 + 142.155) / 777.638)||/||((161.135 + 139.019) / 703.613)|
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|
|=||(57.819 - 0.329||-||94.516)||/||777.638|
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 -2.75 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