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Nicholas Financial, Inc. (NAS:NICK)
Beneish M-Score
-1.26 (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 -1.26 signals that the company is a manipulator.

NICK' s 10-Year Beneish M-Score Range
Min: -3.78   Max: 17767.83
Current: -1.26

-3.78
17767.83

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 -1.54.


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 * 1.167+0.528 * 1+0.404 * 0.7185+0.892 * 0.9046+0.115 * 0.9607
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2589+4.679 * 0.2768-0.327 * 0.9368
=-1.26

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $261.53 Mil.
Revenue was 20.761 + 20.949 + 20.476 + 20.372 = $82.56 Mil.
Gross Profit was 20.759 + 20.946 + 20.473 + 20.37 = $82.55 Mil.
Total Current Assets was $268.09 Mil.
Total Assets was $276.09 Mil.
Property, Plant and Equipment(Net PPE) was $0.77 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.30 Mil.
Selling, General & Admin. Expense(SGA) was $31.86 Mil.
Total Current Liabilities was $135.25 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 3.827 + 4.317 + 5.7 + 4.787 = $18.63 Mil.
Non Operating Income was -20.756 + -20.943 + -20.469 + -20.364 = $-82.53 Mil.
Cash Flow from Operations was 5.047 + 3.083 + 7.689 + 8.918 = $24.74 Mil.
Accounts Receivable was $247.74 Mil.
Revenue was 20.605 + 20.705 + 20.428 + 29.53 = $91.27 Mil.
Gross Profit was 20.601 + 20.704 + 20.424 + 29.527 = $91.26 Mil.
Total Current Assets was $253.11 Mil.
Total Assets was $263.47 Mil.
Property, Plant and Equipment(Net PPE) was $0.76 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.28 Mil.
Selling, General & Admin. Expense(SGA) was $27.98 Mil.
Total Current Liabilities was $137.77 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)
=(261.531 / 82.558) / (247.74 / 91.268)
=3.16784564 / 2.71442346
=1.167

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)
=(20.946 / 91.268) / (20.759 / 82.558)
=0.99986852 / 0.99987887
=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 - (268.091 + 0.765) / 276.086) / (1 - (253.105 + 0.758) / 263.465)
=0.02618749 / 0.03644507
=0.7185

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
=82.558 / 91.268
=0.9046

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))
=(0.284 / (0.284 + 0.758)) / (0.303 / (0.303 + 0.765))
=0.27255278 / 0.28370787
=0.9607

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)
=(31.859 / 82.558) / (27.976 / 91.268)
=0.3858984 / 0.30652584
=1.2589

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 + 135.248) / 276.086) / ((0 + 137.772) / 263.465)
=0.48987634 / 0.52292335
=0.9368

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
=(18.631 - -82.532 - 24.737) / 276.086
=0.2768

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 -1.26 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

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 0.71011.37059276.99250.98341.01961.02280.81891.0137
GMI 0.99910.99931.00030.999610.99990.99991
AQI 1.00041.00011.00140.03461.03821.15020.86550.8981
SGI 1.29991.09451.07221.06031.06351.11161.28261.0198
DEPI 0.82281.03980.89680.93230.96181.27350.93510.9912
SGAI 0.9882.96031.01671.0270.98970.99370.81631.0612
LVGI 1.01950.98560.96881.04460.97470.97490.89661.092
TATA -0.00390.24320.22560.18240.21460.23870.3150.2896
M-score -2.52-1.258,532.55-2.01-1.38-1.14-0.92-1.18

Nicholas Financial, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.31341.30771.04141.0010.58350.56890.79720.85241.1181.167
GMI 0.99991110.99990.99990.99990.999911
AQI 0.85950.85480.86550.94831.01311.02080.89810.73110.72380.7185
SGI 0.82180.81861.00861.04121.80171.82981.29681.22420.93850.9046
DEPI 1.16861.08720.93280.92020.9310.98090.99620.98740.96290.9607
SGAI 1.34381.34521.04041.00470.57910.56950.83270.89531.17621.2589
LVGI 0.92120.91320.89660.89790.90711.0811.0921.10731.12450.9368
TATA 0.18910.19460.2480.2530.32090.33860.28960.28870.28240.2768
M-score -1.54-1.53-1.31-1.26-0.55-0.50-1.09-1.19-1.29-1.26
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