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GuruFocus has detected 1 Warning Sign with Monro Muffler Brake Inc $MNRO.
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Monro Muffler Brake Inc (NAS:MNRO)
Beneish M-Score
-1.44 (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.

Monro Muffler Brake Inc has a M-score of -1.44 signals that the company is a manipulator.

MNRO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: -0.12
Current: -1.44

-3.17
-0.12

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.


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 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 * 2.3912+0.528 * 1.0248+0.404 * 1.0892+0.892 * 1.0739+0.115 * 0.976
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9776+4.679 * -0.0698-0.327 * 1.0765
=-1.44

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $11 Mil.
Revenue was 288.283 + 248.584 + 236.894 + 229.034 = $1,003 Mil.
Gross Profit was 105.6 + 99.997 + 98.068 + 91.893 = $396 Mil.
Total Current Assets was $196 Mil.
Total Assets was $1,163 Mil.
Property, Plant and Equipment(Net PPE) was $381 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $273 Mil.
Total Current Liabilities was $182 Mil.
Long-Term Debt was $380 Mil.
Net Income was 17.566 + 17.544 + 16.755 + 13.903 = $66 Mil.
Non Operating Income was 0.165 + 0.126 + 0.154 + -0.033 = $0 Mil.
Cash Flow from Operations was 33.608 + 46.437 + 21.709 + 44.763 = $147 Mil.
Accounts Receivable was $4 Mil.
Revenue was 238.942 + 239.155 + 236.52 + 219.134 = $934 Mil.
Gross Profit was 93.367 + 100.725 + 99.718 + 83.659 = $377 Mil.
Total Current Assets was $190 Mil.
Total Assets was $1,003 Mil.
Property, Plant and Equipment(Net PPE) was $349 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $260 Mil.
Total Current Liabilities was $161 Mil.
Long-Term Debt was $289 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)
=(11.492 / 1002.795) / (4.475 / 933.751)
=0.01145997 / 0.0047925
=2.3912

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)
=(377.469 / 933.751) / (395.558 / 1002.795)
=0.40425017 / 0.3944555
=1.0248

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 - (195.96 + 381) / 1162.75) / (1 - (189.787 + 349.084) / 1002.619)
=0.50379703 / 0.46253662
=1.0892

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
=1002.795 / 933.751
=1.0739

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))
=(38.951 / (38.951 + 349.084)) / (43.677 / (43.677 + 381))
=0.10038012 / 0.10284758
=0.976

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)
=(272.805 / 1002.795) / (259.846 / 933.751)
=0.27204464 / 0.2782819
=0.9776

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)
=((380.326 + 182.123) / 1162.75) / ((289.214 + 161.316) / 1002.619)
=0.48372307 / 0.44935314
=1.0765

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
=(65.768 - 0.412 - 146.517) / 1162.75
=-0.0698

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 -1.44 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 local exchange's currency.

Monro Muffler Brake Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.13930.9030.89450.79020.84020.93091.45460.84720.87261.5919
GMI 1.0051.00380.98810.98221.01231.00471.05950.98740.97420.9665
AQI 1.09351.27980.94691.10631.02621.17761.26271.01211.13351.034
SGI 1.13151.05311.08361.1861.12761.07831.06621.13581.07581.055
DEPI 0.98640.99531.00390.9950.99541.00691.09670.89951.02540.9698
SGAI 1.03441.03140.9970.96550.9350.95771.03660.96731.00791.0318
LVGI 0.99751.48450.91591.00870.76560.91371.51260.89261.06390.9638
TATA -0.045-0.0427-0.066-0.1207-0.045-0.0559-0.0571-0.0528-0.0721-0.0601
M-score -2.41-2.77-2.81-3.04-2.62-2.62-2.30-2.72-2.85-2.17

Monro Muffler Brake Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.94740.95580.87261.35861.3081.30851.59191.42322.60032.3912
GMI 0.95550.96410.97420.98860.98180.97620.96650.97690.99961.0248
AQI 1.1071.10281.13351.10561.07711.03121.0341.09281.06441.0892
SGI 1.07631.06611.07581.08391.08461.06281.0551.03341.02371.0739
DEPI 1.02131.0551.02540.98530.96750.96810.96980.99551.0020.976
SGAI 0.98271.00031.00781.00131.01321.02291.03181.03261.0230.9776
LVGI 1.11651.07181.06391.05150.95470.95090.96381.02851.05691.0765
TATA -0.0549-0.0675-0.0721-0.0656-0.0519-0.0544-0.0601-0.0495-0.0747-0.0698
M-score -2.73-2.77-2.85-2.36-2.33-2.39-2.17-2.28-1.33-1.44
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