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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.
During the past 13 years, the highest Beneish M-Score of Nicholas Financial Inc was 40495.15. The lowest was -3.78. And the median was -1.53.
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 * 1.0502||+||0.528 * 1||+||0.404 * 0.863||+||0.892 * 1.0497||+||0.115 * 1.2203|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9392||+||4.679 * 0.2386||-||0.327 * 1.4354|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $308.77 Mil.|
Revenue was 22.687 + 22.025 + 21.934 + 21.801 = $88.45 Mil.
Gross Profit was 22.687 + 22.025 + 21.934 + 21.801 = $88.45 Mil.
Total Current Assets was $313.56 Mil.
Total Assets was $321.33 Mil.
Property, Plant and Equipment(Net PPE) was $1.37 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.40 Mil.
Selling, General & Admin. Expense(SGA) was $34.28 Mil.
Total Current Liabilities was $220.55 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 3.256 + 3.67 + 3.847 + 3.77 = $14.54 Mil.
Non Operating Income was -22.687 + -22.025 + -21.934 + -21.801 = $-88.45 Mil.
Cash Flow from Operations was 3.31 + 8.622 + 8.267 + 6.125 = $26.32 Mil.
|Accounts Receivable was $280.10 Mil.
Revenue was 21.723 + 21.333 + 20.443 + 20.761 = $84.26 Mil.
Gross Profit was 21.723 + 21.333 + 20.443 + 20.761 = $84.26 Mil.
Total Current Assets was $288.02 Mil.
Total Assets was $295.78 Mil.
Property, Plant and Equipment(Net PPE) was $0.93 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.35 Mil.
Selling, General & Admin. Expense(SGA) was $34.77 Mil.
Total Current Liabilities was $141.44 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)|
|=||(308.771 / 88.447)||/||(280.103 / 84.26)|
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)|
|=||(22.025 / 84.26)||/||(22.687 / 88.447)|
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 - (313.557 + 1.369) / 321.326)||/||(1 - (288.018 + 0.931) / 295.775)|
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))|
|=||(0.351 / (0.351 + 0.931))||/||(0.396 / (0.396 + 1.369))|
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)|
|=||(34.275 / 88.447)||/||(34.766 / 84.26)|
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 + 220.546) / 321.326)||/||((0 + 141.435) / 295.775)|
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|
|=||(14.543 - -88.447||-||26.324)||/||321.326|
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 -1.44 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