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Nicholas Financial Inc (NAS:NICK)
Beneish M-Score
-1.44 (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 -1.44 signals that the company is a manipulator.

NICK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.78   Max: 40495.15
Current: -1.44

-3.78
40495.15

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.


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 * 1.0502+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
=-1.44

* 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

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)
=(308.771 / 88.447) / (280.103 / 84.26)
=3.49102853 / 3.32427012
=1.0502

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)
=(22.025 / 84.26) / (22.687 / 88.447)
=1 / 1
=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 - (313.557 + 1.369) / 321.326) / (1 - (288.018 + 0.931) / 295.775)
=0.01991747 / 0.02307835
=0.863

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
=88.447 / 84.26
=1.0497

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))
=0.27379095 / 0.22436261
=1.2203

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)
=0.38752021 / 0.41260385
=0.9392

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)
=0.68636214 / 0.47818443
=1.4354

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
=(14.543 - -88.447 - 26.324) / 321.326
=0.2386

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.


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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.71011.37050.207344019.97851.01961.02280.81891.01371.07531.0175
GMI 0.99910.99931.00030.999610.99990.99990.999911
AQI 1.00041.00011.00140.03461.03821.15020.86550.89810.76230.8637
SGI 1.29991.09451.07221.06031.06351.11161.28261.01981.00631.0504
DEPI 0.82281.03980.89680.93230.96181.27350.93510.99121.03670.9054
SGAI 0.9882.96031.01671.0270.98970.99370.81631.06171.1610.9503
LVGI 1.01950.98560.96881.04460.97470.97490.89661.0920.95961.4092
TATA -0.00390.24320.22560.18240.21460.23870.3150.28960.27510.2575
M-score -2.52-1.25-2.0940,495.47-1.38-1.14-0.92-1.18-1.22-1.41

Nicholas Financial Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.1181.17371.07531.07241.04821.04911.01751.03091.05021.0444
GMI 0.99990.99990.99990.99990.999911111.1033
AQI 0.72380.71850.76230.83020.86870.84320.86370.86240.8631.5584
SGI 0.93850.90461.00631.01621.02251.03321.05041.04791.04971.0481
DEPI 1.40391.40091.03411.01321.02950.98990.90370.95951.22030.2866
SGAI 1.17641.25921.16141.14281.11781.0460.95030.93570.93920.7316
LVGI 1.12450.93680.95960.95850.94520.95041.40921.41711.43541.4099
TATA 0.28240.27680.27510.27020.26450.26350.25750.24250.23860.2549
M-score -1.24-1.20-1.22-1.21-1.23-1.23-1.41-1.46-1.44-1.09
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