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Nicholas Financial Inc (NAS:NICK)
Beneish M-Score
-1.16 (As of Today)

Warning Sign:

Beneish M-Score -1.16 higher than -2.22, which implies that it might have manipulated its financial results.

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 -1.16 signals that the company is a manipulator.

NICK' s Beneish M-Score Range Over the Past 10 Years
Min: -8.7   Max: 40495.15
Current: -1.16

-8.7
40495.15

During the past 13 years, the highest Beneish M-Score of Nicholas Financial Inc was 40495.15. The lowest was -8.70. And the median was -1.44.


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 * 1.0343+0.528 * 1.1078+0.404 * 0.9671+0.892 * 1.0451+0.115 * 1.1305
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7437+4.679 * 0.2429-0.327 * 0.9701
=-1.16

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $312.43 Mil.
Revenue was 23.238 + 22.757 + 22.687 + 22.025 = $90.71 Mil.
Gross Profit was 14.411 + 22.757 + 22.687 + 22.025 = $81.88 Mil.
Total Current Assets was $317.40 Mil.
Total Assets was $325.31 Mil.
Property, Plant and Equipment(Net PPE) was $1.29 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.46 Mil.
Selling, General & Admin. Expense(SGA) was $26.13 Mil.
Total Current Liabilities was $218.34 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 2.725 + 2.727 + 3.256 + 3.67 = $12.38 Mil.
Non Operating Income was -23.238 + -22.757 + -22.687 + -22.025 = $-90.71 Mil.
Cash Flow from Operations was 6.678 + 5.461 + 3.31 + 8.622 = $24.07 Mil.
Accounts Receivable was $289.02 Mil.
Revenue was 21.934 + 21.801 + 21.723 + 21.333 = $86.79 Mil.
Gross Profit was 21.934 + 21.801 + 21.723 + 21.333 = $86.79 Mil.
Total Current Assets was $295.30 Mil.
Total Assets was $302.53 Mil.
Property, Plant and Equipment(Net PPE) was $0.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.37 Mil.
Selling, General & Admin. Expense(SGA) was $33.62 Mil.
Total Current Liabilities was $209.32 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)
=(312.43 / 90.707) / (289.017 / 86.791)
=3.44438687 / 3.33003422
=1.0343

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)
=(86.791 / 86.791) / (81.88 / 90.707)
=1 / 0.90268667
=1.1078

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 - (317.404 + 1.29) / 325.309) / (1 - (295.296 + 0.872) / 302.529)
=0.02033451 / 0.02102608
=0.9671

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
=90.707 / 86.791
=1.0451

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))
=(0.367 / (0.367 + 0.872)) / (0.458 / (0.458 + 1.29))
=0.29620662 / 0.26201373
=1.1305

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)
=(26.133 / 90.707) / (33.624 / 86.791)
=0.28810345 / 0.38741344
=0.7437

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 + 218.338) / 325.309) / ((0 + 209.317) / 302.529)
=0.6711711 / 0.69189069
=0.9701

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
=(12.378 - -90.707 - 24.071) / 325.309
=0.2429

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 -1.16 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 1.37050.207344019.97851.01961.02280.96720.85831.07531.01751.0343
GMI 0.99931.00030.999610.999910.999910.99991.6024
AQI 1.00011.00140.03461.03821.15020.86550.89810.76230.86370.9671
SGI 1.09451.07221.06031.06351.11161.08591.20451.00631.05041.0451
DEPI 1.03980.89680.93230.96181.27350.93510.99121.03670.90541.1283
SGAI 1.02341.08782.77650.98970.99370.97070.89251.16120.95060.034
LVGI 0.98560.96881.04460.97470.97490.89661.0920.95961.40920.9701
TATA 0.2432-0.07110.18240.21460.23870.26690.28960.27510.25750.2429
M-score -0.91-3.4940,495.17-1.38-1.14-1.21-1.13-1.22-1.41-0.78

Nicholas Financial Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.17371.07531.07241.04821.04911.01751.03091.05021.04581.0343
GMI 0.9997-0.078-0.0789-0.0797-0.0807-12.8193-12.6775-12.5518-12.38661.1078
AQI 0.71850.76230.83020.86870.84320.86370.86240.8630.92990.9671
SGI 0.90461.00631.01621.02251.03321.05041.04791.04971.04811.0451
DEPI 0.96071.03411.01321.02950.98990.90370.95951.22031.21951.1305
SGAI 1.25971.16591.14711.1221.050.94640.93190.93540.95620.7437
LVGI 0.93680.95960.95850.94520.95041.40921.41711.43541.46090.9701
TATA 0.27690.27510.27020.26450.26350.25750.24250.23860.23810.2429
M-score -1.25-1.79-1.78-1.80-1.80-8.70-8.68-8.59-8.50-1.16
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