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Nicholas Financial Inc (NAS:NICK)
Beneish M-Score
-1.43 (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.

Nicholas Financial Inc has a M-score of -1.43 signals that the company is a manipulator.

NICK' s Beneish M-Score Range Over the Past 10 Years
Min: -7.31   Max: 40495.15
Current: -1.43

-7.31
40495.15

During the past 13 years, the highest Beneish M-Score of Nicholas Financial Inc was 40495.15. The lowest was -7.31. And the median was -1.40.


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 Nicholas Financial 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 * 1.0458+0.528 * 1+0.404 * 0.9299+0.892 * 1.0481+0.115 * 1.2195
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9601+4.679 * 0.238-0.327 * 1.4609
=-1.43

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $310.73 Mil.
Revenue was 22.757 + 22.687 + 22.025 + 21.934 = $89.40 Mil.
Gross Profit was 22.757 + 22.687 + 22.025 + 21.934 = $89.40 Mil.
Total Current Assets was $316.44 Mil.
Total Assets was $324.49 Mil.
Property, Plant and Equipment(Net PPE) was $1.38 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.42 Mil.
Selling, General & Admin. Expense(SGA) was $34.66 Mil.
Total Current Liabilities was $220.70 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 2.727 + 3.256 + 3.67 + 3.847 = $13.50 Mil.
Non Operating Income was -22.757 + -22.687 + -22.025 + -21.934 = $-89.40 Mil.
Cash Flow from Operations was 5.461 + 3.31 + 8.622 + 8.267 = $25.66 Mil.
Accounts Receivable was $283.49 Mil.
Revenue was 21.801 + 21.723 + 21.333 + 20.443 = $85.30 Mil.
Gross Profit was 21.801 + 21.723 + 21.333 + 20.443 = $85.30 Mil.
Total Current Assets was $289.05 Mil.
Total Assets was $296.50 Mil.
Property, Plant and Equipment(Net PPE) was $0.91 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.36 Mil.
Selling, General & Admin. Expense(SGA) was $34.44 Mil.
Total Current Liabilities was $138.04 Mil.
Long-Term Debt was $0.00 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)
=(310.733 / 89.403) / (283.492 / 85.3)
=3.47564399 / 3.32347011
=1.0458

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)
=(22.687 / 85.3) / (22.757 / 89.403)
=1 / 1
=1

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 - (316.443 + 1.38) / 324.486) / (1 - (289.047 + 0.906) / 296.5)
=0.02053401 / 0.02208094
=0.9299

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
=89.403 / 85.3
=1.0481

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))
=(0.364 / (0.364 + 0.906)) / (0.424 / (0.424 + 1.38))
=0.28661417 / 0.23503326
=1.2195

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)
=(34.657 / 89.403) / (34.44 / 85.3)
=0.38764918 / 0.40375147
=0.9601

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)
=((0 + 220.697) / 324.486) / ((0 + 138.044) / 296.5)
=0.68014337 / 0.46557841
=1.4609

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
=(13.5 - -89.403 - 25.66) / 324.486
=0.238

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.

Nicholas Financial Inc has a M-score of -1.43 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.

Nicholas Financial Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.37050.207344019.97851.01961.02280.96720.85831.07531.01751
GMI 0.99931.00030.999610.999910.999910.99991
AQI 1.00011.00140.03461.03821.15020.86550.89810.76230.86371
SGI 1.09451.07221.06031.06351.11161.08591.20451.00631.05041
DEPI 1.03980.89680.93230.96181.27350.93510.99121.03670.90541
SGAI 1.02341.08782.77650.98970.99370.97070.89251.16120.95061
LVGI 0.98560.96881.04460.97470.97490.89661.0920.95961.40921
TATA 0.2432-0.07110.18240.21460.23870.26690.28960.27510.25750.2575
M-score -0.91-3.4940,495.17-1.38-1.14-1.21-1.13-1.22-1.41-1.28

Nicholas Financial Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.17371.07531.07241.04821.04911.01751.03091.05021.04581.0324
GMI 0.999711.00011.00011.000111111.1078
AQI 0.71850.76230.83020.86870.84320.86370.86240.8630.92991.6993
SGI 0.90461.00631.01621.02251.03321.05041.04791.04971.04811.0451
DEPI 0.96071.03411.01321.02950.98990.90370.95951.22031.21950.2962
SGAI 1.25971.1611.14241.11741.04570.95030.93570.93920.96010.7437
LVGI 0.93680.95960.95850.94520.95041.40921.41711.43541.46090.9375
TATA 0.27690.27510.27020.26450.26350.25750.24250.23860.2380.2634
M-score -1.25-1.22-1.21-1.23-1.23-1.41-1.46-1.44-1.43-0.85
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