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Oil-Dri Corp of America (NYSE:ODC)
Beneish M-Score
-2.17 (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.

Oil-Dri Corp of America has a M-score of -2.17 signals that the company is a manipulator.

ODC' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -2.17
Current: -2.17

-3.14
-2.17

During the past 13 years, the highest Beneish M-Score of Oil-Dri Corp of America was -2.17. The lowest was -3.14. And the median was -2.69.


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 Oil-Dri Corp of America 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 * 0.9364+0.528 * 1.1848+0.404 * 1.9387+0.892 * 1.0628+0.115 * 0.9786
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9345+4.679 * -0.0451-0.327 * 0.8861
=-2.17

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $31.0 Mil.
Revenue was 66.045 + 67.417 + 69.305 + 63.546 = $266.3 Mil.
Gross Profit was 12.373 + 13.884 + 16.893 + 16.5 = $59.7 Mil.
Total Current Assets was $83.5 Mil.
Total Assets was $186.2 Mil.
Property, Plant and Equipment(Net PPE) was $74.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.4 Mil.
Selling, General & Admin. Expense(SGA) was $47.2 Mil.
Total Current Liabilities was $29.5 Mil.
Long-Term Debt was $18.9 Mil.
Net Income was 0.466 + 0.722 + 4.281 + 2.887 = $8.4 Mil.
Non Operating Income was 0.078 + 0.247 + 0.175 + -0.035 = $0.5 Mil.
Cash Flow from Operations was 5.586 + 8.31 + 3.052 + -0.652 = $16.3 Mil.
Accounts Receivable was $31.1 Mil.
Revenue was 63.892 + 64.152 + 61.122 + 61.417 = $250.6 Mil.
Gross Profit was 16.108 + 16.891 + 16.269 + 17.231 = $66.5 Mil.
Total Current Assets was $103.4 Mil.
Total Assets was $183.6 Mil.
Property, Plant and Equipment(Net PPE) was $66.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.9 Mil.
Selling, General & Admin. Expense(SGA) was $47.6 Mil.
Total Current Liabilities was $31.4 Mil.
Long-Term Debt was $22.4 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)
=(30.997 / 266.313) / (31.148 / 250.583)
=0.11639312 / 0.12430213
=0.9364

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)
=(13.884 / 250.583) / (12.373 / 266.313)
=0.26537714 / 0.22398456
=1.1848

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 - (83.516 + 74.896) / 186.204) / (1 - (103.372 + 66.055) / 183.559)
=0.14925566 / 0.07698887
=1.9387

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
=266.313 / 250.583
=1.0628

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))
=(8.946 / (8.946 + 66.055)) / (10.396 / (10.396 + 74.896))
=0.11927841 / 0.12188716
=0.9786

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)
=(47.232 / 266.313) / (47.558 / 250.583)
=0.17735522 / 0.18978941
=0.9345

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)
=((18.9 + 29.5) / 186.204) / ((22.4 + 31.447) / 183.559)
=0.25992997 / 0.29334982
=0.8861

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
=(8.356 - 0.465 - 16.296) / 186.204
=-0.0451

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.

Oil-Dri Corp of America has a M-score of -2.17 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.

Oil-Dri Corp of America Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
DSRI 0.96471.01261.03481.02560.90891.01071.03850.97460.98980.9364
GMI 1.08531.15770.86121.08660.94850.92151.02790.90010.92381.1848
AQI 1.00190.88380.96571.15111.0760.9230.78691.0730.91821.9387
SGI 1.01271.09231.03371.09541.01670.92721.03521.06141.04111.0628
DEPI 1.09741.14481.00170.90061.14331.04950.95250.88071.05440.9786
SGAI 0.91240.89341.1440.86561.02671.120.97121.22670.96570.9345
LVGI 0.88591.20640.91830.90320.81380.98141.17140.97450.92910.8861
TATA -0.0549-0.0436-0.0709-0.0192-0.0435-0.112-0.0258-0.1007-0.0498-0.0451
M-score -2.65-2.59-2.83-2.31-2.68-3.14-2.66-2.99-2.72-2.17

Oil-Dri Corp of America Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.09420.97460.95121.02680.93530.98980.97041.11421.03480.9364
GMI 0.93250.90010.86730.870.88530.92380.98291.0291.10891.1848
AQI 0.87221.0731.05731.04791.11240.91821.00371.73561.55671.9387
SGI 1.06091.06141.05421.04451.04431.04111.0421.07171.0661.0628
DEPI 0.90710.88070.92370.95990.99891.05441.06491.03011.00190.9786
SGAI 1.08921.22671.1021.17921.11710.96571.02640.90240.91170.9345
LVGI 0.92690.97450.91880.95340.94260.92910.88620.88970.90570.8861
TATA -0.0515-0.1007-0.1039-0.09-0.0975-0.0498-0.0307-0.0005-0.0136-0.0451
M-score -2.67-2.99-3.01-2.91-2.97-2.72-2.58-1.94-2.12-2.17
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