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Pool Corp (NAS:POOL)
Beneish M-Score
-2.54 (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.

Pool Corp has a M-score of -2.54 suggests that the company is not a manipulator.

POOL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: -1.14
Current: -2.54

-3.25
-1.14

During the past 13 years, the highest Beneish M-Score of Pool Corp was -1.14. The lowest was -3.25. And the median was -2.50.


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 Pool Corp 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 * 0.9657+0.528 * 1.0016+0.404 * 0.9788+0.892 * 1.0519+0.115 * 1.1013
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.961+4.679 * -0.019-0.327 * 0.9877
=-2.54

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $18 Mil.
Revenue was 415.075 + 645.779 + 851.855 + 450.43 = $2,363 Mil.
Gross Profit was 118.295 + 184.288 + 248.26 + 124.801 = $676 Mil.
Total Current Assets was $662 Mil.
Total Assets was $936 Mil.
Property, Plant and Equipment(Net PPE) was $70 Mil.
Depreciation, Depletion and Amortization(DDA) was $17 Mil.
Selling, General & Admin. Expense(SGA) was $459 Mil.
Total Current Liabilities was $305 Mil.
Long-Term Debt was $328 Mil.
Net Income was 2.486 + 39.447 + 77.924 + 8.419 = $128 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 68.067 + 134.629 + 1.007 + -57.653 = $146 Mil.
Accounts Receivable was $18 Mil.
Revenue was 376.442 + 615.536 + 848.24 + 406.344 = $2,247 Mil.
Gross Profit was 106.02 + 176.244 + 246.976 + 114.1 = $643 Mil.
Total Current Assets was $637 Mil.
Total Assets was $893 Mil.
Property, Plant and Equipment(Net PPE) was $56 Mil.
Depreciation, Depletion and Amortization(DDA) was $16 Mil.
Selling, General & Admin. Expense(SGA) was $454 Mil.
Total Current Liabilities was $292 Mil.
Long-Term Debt was $319 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)
=(17.835 / 2363.139) / (17.558 / 2246.562)
=0.00754717 / 0.0078155
=0.9657

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)
=(184.288 / 2246.562) / (118.295 / 2363.139)
=0.28636646 / 0.28590955
=1.0016

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 - (661.744 + 69.854) / 936.031) / (1 - (637.213 + 56.475) / 892.937)
=0.21840409 / 0.22313892
=0.9788

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
=2363.139 / 2246.562
=1.0519

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))
=(15.882 / (15.882 + 56.475)) / (17.388 / (17.388 + 69.854))
=0.219495 / 0.19930767
=1.1013

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)
=(459.422 / 2363.139) / (454.47 / 2246.562)
=0.19441175 / 0.20229577
=0.961

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)
=((328.015 + 304.845) / 936.031) / ((319.309 + 291.908) / 892.937)
=0.67611009 / 0.68450182
=0.9877

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
=(128.276 - 0 - 146.05) / 936.031
=-0.019

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.

Pool Corp has a M-score of -2.54 suggests that the company will not 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.

Pool Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.29310.87682.76110.96581.00550.96840.72380.15431.14870.9657
GMI 0.98511.02740.95270.9891.00010.98521.02081.02140.99281.0016
AQI 1.0230.97251.0431.02231.02420.84330.9550.96130.9490.9788
SGI 1.231.00970.9250.86331.0481.11131.08961.06431.08021.0519
DEPI 0.96920.95591.00261.0770.99631.25690.99030.99320.99361.1013
SGAI 1.01961.0551.0891.04690.97720.98490.94180.96260.98810.961
LVGI 1.03461.1540.9480.91550.90721.09170.9981.00981.10490.9877
TATA 0.0336-0.0028-0.0437-0.1266-0.0499-0.004-0.0475-0.0094-0.0125-0.019
M-score -2.78-2.66-1.14-3.19-2.62-2.50-2.87-3.25-2.39-2.54

Pool Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.15431.03991.00121.05961.14871.04450.98451.0090.96571.1214
GMI 1.02141.01891.00820.99760.99280.99430.99771.00341.00160.9991
AQI 0.96130.9690.96860.95070.9490.97120.96960.9640.97880.9205
SGI 1.06431.07811.08921.08071.08021.08271.05551.05141.05191.0599
DEPI 0.99321.00430.99650.99260.99361.04071.0521.07131.10131.0724
SGAI 0.96260.9690.97310.98640.98810.97650.97130.95860.9610.9548
LVGI 1.00981.05091.13981.21161.10491.03841.02370.99460.98771.0625
TATA -0.0094-0.00950.01730.0214-0.01250.01240.0026-0.0414-0.019-0.0183
M-score -3.25-2.43-2.37-2.34-2.39-2.33-2.44-2.62-2.54-2.44
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