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Beneish M-Score -1.21 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 -1.21 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Nicholas Financial Inc was 17767.83. The lowest was -3.78. And the median was -1.46.
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 * 1.0724||+||0.528 * 1||+||0.404 * 0.8302||+||0.892 * 1.0162||+||0.115 * 1.0132|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1425||+||4.679 * 0.2703||-||0.327 * 0.9585|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $278.17 Mil.|
Revenue was 21.333 + 20.443 + 20.761 + 20.949 = $83.49 Mil.
Gross Profit was 21.333 + 20.441 + 20.759 + 20.946 = $83.48 Mil.
Total Current Assets was $283.32 Mil.
Total Assets was $291.29 Mil.
Property, Plant and Equipment(Net PPE) was $0.90 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.33 Mil.
Selling, General & Admin. Expense(SGA) was $34.45 Mil.
Total Current Liabilities was $141.63 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 4.909 + 2.86 + 3.827 + 4.317 = $15.91 Mil.
Non Operating Income was -21.333 + -20.441 + -20.756 + -20.943 = $-83.47 Mil.
Cash Flow from Operations was 7.003 + 5.523 + 5.047 + 3.083 = $20.66 Mil.
|Accounts Receivable was $255.26 Mil.
Revenue was 20.476 + 20.372 + 20.605 + 20.705 = $82.16 Mil.
Gross Profit was 20.476 + 20.37 + 20.601 + 20.704 = $82.15 Mil.
Total Current Assets was $261.44 Mil.
Total Assets was $270.09 Mil.
Property, Plant and Equipment(Net PPE) was $0.76 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.29 Mil.
Selling, General & Admin. Expense(SGA) was $29.67 Mil.
Total Current Liabilities was $137.01 Mil.
Long-Term Debt was $0.00 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)|
|=||(278.173 / 83.486)||/||(255.258 / 82.158)|
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)|
|=||(20.441 / 82.158)||/||(21.333 / 83.486)|
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 - (283.318 + 0.897) / 291.285)||/||(1 - (261.439 + 0.757) / 270.092)|
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))|
|=||(0.287 / (0.287 + 0.757))||/||(0.334 / (0.334 + 0.897))|
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)|
|=||(34.446 / 83.486)||/||(29.669 / 82.158)|
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 + 141.63) / 291.285)||/||((0 + 137.01) / 270.092)|
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|
|=||(15.913 - -83.473||-||20.656)||/||291.285|
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 -1.21 signals that the company is likely to 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
Nicholas Financial Inc Annual Data
Nicholas Financial Inc Quarterly Data