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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 -7.31. And the median was -1.40.
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|
|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
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)|
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)|
|=||(22.687 / 85.3)||/||(22.757 / 89.403)|
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 - (316.443 + 1.38) / 324.486)||/||(1 - (289.047 + 0.906) / 296.5)|
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))|
|=||(0.364 / (0.364 + 0.906))||/||(0.424 / (0.424 + 1.38))|
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)|
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)|
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|
|=||(13.5 - -89.403||-||25.66)||/||324.486|
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.
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