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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 -2.58.
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 * 1.3085||+||0.528 * 0.9762||+||0.404 * 1.0312||+||0.892 * 1.0628||+||0.115 * 0.9681|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0229||+||4.679 * -0.0544||-||0.327 * 0.9509|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $4.5 Mil.|
Revenue was 238.942 + 239.155 + 236.52 + 219.134 = $933.8 Mil.
Gross Profit was 93.367 + 100.725 + 99.718 + 83.659 = $377.5 Mil.
Total Current Assets was $189.8 Mil.
Total Assets was $1,002.6 Mil.
Property, Plant and Equipment(Net PPE) was $349.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.0 Mil.
Selling, General & Admin. Expense(SGA) was $259.8 Mil.
Total Current Liabilities was $161.3 Mil.
Long-Term Debt was $289.2 Mil.
Net Income was 15.231 + 18.872 + 18.799 + 12.551 = $65.5 Mil.
Non Operating Income was 0.193 + 0.097 + 0.106 + 0.097 = $0.5 Mil.
Cash Flow from Operations was 36.264 + 13.856 + 31.621 + 37.733 = $119.5 Mil.
|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.
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)|
|=||(4.475 / 933.751)||/||(3.218 / 878.603)|
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)|
|=||(100.725 / 878.603)||/||(93.367 / 933.751)|
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 - (189.787 + 349.084) / 1002.619)||/||(1 - (184.594 + 316.832) / 909.291)|
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))|
|=||(34.105 / (34.105 + 316.832))||/||(38.951 / (38.951 + 349.084))|
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)|
|=||(259.835 / 933.751)||/||(239.016 / 878.603)|
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)|
|=||((289.214 + 161.316) / 1002.619)||/||((274.297 + 155.372) / 909.291)|
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|
|=||(65.453 - 0.493||-||119.474)||/||1002.619|
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 -2.39 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