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Nicholas Financial Inc (NAS:NICK)
Beneish M-Score
-1.40 (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 -1.40 signals that the company is a manipulator.

NICK' s 10-Year Beneish M-Score Range
Min: -3.37   Max: 40495.15
Current: -1.4

-3.37
40495.15

During the past 13 years, the highest Beneish M-Score of Nicholas Financial Inc was 40495.15. The lowest was -3.37. And the median was -1.40.


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 * 0.9174+0.528 * 0.9457+0.404 * 0.9841+0.892 * 1.1699+0.115 * 1.0341
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5483+4.679 * 0.2015-0.327 * 0.9512
=-1.40

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $269.34 Mil.
Revenue was 20.443 + 20.761 + 20.949 + 20.476 = $82.63 Mil.
Gross Profit was 12.6 + 13.246 + 12.869 + 12.479 = $51.19 Mil.
Total Current Assets was $271.98 Mil.
Total Assets was $283.43 Mil.
Property, Plant and Equipment(Net PPE) was $0.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.32 Mil.
Selling, General & Admin. Expense(SGA) was $18.49 Mil.
Total Current Liabilities was $127.90 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 2.86 + 3.827 + 4.317 + 5.7 = $16.70 Mil.
Non Operating Income was -20.441 + 0.099 + -20.943 + -20.47 = $-61.76 Mil.
Cash Flow from Operations was 5.523 + 5.047 + 3.083 + 7.689 = $21.34 Mil.
Accounts Receivable was $250.96 Mil.
Revenue was 17.688 + 17.889 + 17.771 + 17.28 = $70.63 Mil.
Gross Profit was 10.027 + 10.769 + 10.44 + 10.146 = $41.38 Mil.
Total Current Assets was $253.76 Mil.
Total Assets was $264.54 Mil.
Property, Plant and Equipment(Net PPE) was $0.74 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.28 Mil.
Selling, General & Admin. Expense(SGA) was $28.82 Mil.
Total Current Liabilities was $125.50 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)
=(269.344 / 82.629) / (250.961 / 70.628)
=3.25967881 / 3.55327915
=0.9174

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)
=(13.246 / 70.628) / (12.6 / 82.629)
=0.58591493 / 0.61956456
=0.9457

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 - (271.979 + 0.87) / 283.43) / (1 - (253.759 + 0.742) / 264.536)
=0.03733197 / 0.03793435
=0.9841

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
=82.629 / 70.628
=1.1699

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 + 0.742)) / (0.318 / (0.318 + 0.87))
=0.27680312 / 0.26767677
=1.0341

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)
=(18.487 / 82.629) / (28.819 / 70.628)
=0.22373501 / 0.4080393
=0.5483

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 + 127.9) / 283.43) / ((0 + 125.5) / 264.536)
=0.45125781 / 0.47441558
=0.9512

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
=(16.704 - -61.755 - 21.342) / 283.43
=0.2015

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 -1.40 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 0.71011.37050.207344019.97851.01961.02280.96960.99950.9174
GMI 0.99910.99931.00030.999610.99991.65991.02470.9289
AQI 1.00041.00011.00140.03461.03821.15021.07160.86160.9841
SGI 1.29991.09451.07221.06031.06351.11161.08591.03611.1699
DEPI 0.82281.03980.89680.93230.96181.27350.93510.99121.0367
SGAI 0.9882.96031.01671.0270.98970.99370.96421.04450.1085
LVGI 1.01950.98560.96881.04460.97470.97490.83321.08960.9512
TATA -0.00390.24320.22560.18240.21460.23870.00140.24550.2751
M-score -2.52-1.25-2.0940,495.47-1.38-1.14-1.99-1.38-0.99

Nicholas Financial Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.41210.77940.41310.41740.68630.90421.111.0950.91740.9637
GMI 11.12551.21481.35411.70641.50011.37321.21280.94570.9515
AQI 0.86550.04351.20391.24351.06680.89980.60920.58990.98410.8833
SGI 0.74381.33722.5452.47991.51271.15420.94230.96851.16991.1309
DEPI 0.93280.92020.9310.98090.99620.98740.96290.96071.03411.0132
SGAI 1.41080.78230.410.42020.71390.94971.17160.90150.54830.3355
LVGI 0.89660.80970.83661.02391.01251.121.21930.9890.95120.9668
TATA 0.2480.17570.23350.17220.11330.19180.19830.19180.20150.1987
M-score -1.27-1.79-0.21-0.52-1.34-1.34-1.57-1.56-1.40-1.41
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