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Pool Corp (NAS:POOL)
Beneish M-Score
-2.40 (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.

Pool Corp has a M-score of -2.40 suggests that the company is not a manipulator.

POOL' s 10-Year Beneish M-Score Range
Min: -3.29   Max: 0.37
Current: -2.4

-3.29
0.37

During the past 13 years, the highest Beneish M-Score of Pool Corp was 0.37. The lowest was -3.29. And the median was -2.37.


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 * 1.0012+0.528 * 1.0082+0.404 * 0.9686+0.892 * 1.0892+0.115 * 0.9965
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9731+4.679 * 0.0103-0.327 * 1.1398
=-2.40

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $307 Mil.
Revenue was 848.24 + 406.344 + 340.789 + 578.157 = $2,174 Mil.
Gross Profit was 246.976 + 114.1 + 95.793 + 162.557 = $619 Mil.
Total Current Assets was $801 Mil.
Total Assets was $1,055 Mil.
Property, Plant and Equipment(Net PPE) was $57 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $442 Mil.
Total Current Liabilities was $323 Mil.
Long-Term Debt was $431 Mil.
Net Income was 73.863 + 4.188 + -4.975 + 32.332 = $105 Mil.
Non Operating Income was 0 + 0 + 10.478 + -3.088 = $7 Mil.
Cash Flow from Operations was -13.543 + -37.345 + 51.242 + 86.824 = $87 Mil.
Accounts Receivable was $281 Mil.
Revenue was 790.392 + 370.362 + 306.818 + 528.027 = $1,996 Mil.
Gross Profit was 228.166 + 104.761 + 88.938 + 151.501 = $573 Mil.
Total Current Assets was $748 Mil.
Total Assets was $990 Mil.
Property, Plant and Equipment(Net PPE) was $51 Mil.
Depreciation, Depletion and Amortization(DDA) was $14 Mil.
Selling, General & Admin. Expense(SGA) was $417 Mil.
Total Current Liabilities was $320 Mil.
Long-Term Debt was $300 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)
=(306.5 / 2173.53) / (281.064 / 1995.599)
=0.14101485 / 0.14084192
=1.0012

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)
=(114.1 / 1995.599) / (246.976 / 2173.53)
=0.28731524 / 0.28498617
=1.0082

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 - (801.041 + 57.275) / 1055.448) / (1 - (748.001 + 51.11) / 990.009)
=0.18677566 / 0.19282451
=0.9686

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
=2173.53 / 1995.599
=1.0892

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))
=(13.639 / (13.639 + 51.11)) / (15.353 / (15.353 + 57.275))
=0.21064418 / 0.2113923
=0.9965

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)
=(441.72 / 2173.53) / (416.781 / 1995.599)
=0.20322701 / 0.20885007
=0.9731

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)
=((430.971 + 322.749) / 1055.448) / ((300.426 + 319.84) / 990.009)
=0.71412329 / 0.62652562
=1.1398

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
=(105.408 - 7.39 - 87.178) / 1055.448
=0.0103

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 -2.40 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.48111.22660.29310.87682.76110.96581.00550.96840.72380.1543
GMI 0.96381.01570.98511.02740.95270.9891.00010.98521.02081.0214
AQI 1.00520.9691.0230.97251.0431.02231.02420.84330.9550.9613
SGI 1.13411.18451.231.00970.9250.86331.0481.11131.08961.0643
DEPI 0.80381.32050.96920.95591.00261.0770.99631.25690.99030.9932
SGAI 1.01980.95481.01961.0551.0891.04690.97720.98490.94180.9626
LVGI 1.00241.17191.03461.1540.9480.91550.90721.09170.9981.0098
TATA 0.00820.05340.0315-0.0039-0.0417-0.1266-0.0499-0.004-0.0475-0.0094
M-score -1.92-1.87-2.79-2.66-1.13-3.19-2.62-2.50-2.87-3.25

Pool Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.04420.92010.99880.72380.87610.98720.97240.15431.03991.0012
GMI 0.99291.00721.01891.02081.02221.02171.0211.02141.01891.0082
AQI 0.91390.95450.85540.9550.89120.88760.97770.96130.9690.9686
SGI 1.1121.10341.08691.08961.06511.05411.06681.06431.07811.0892
DEPI 1.19281.05171.01540.99030.95351.00110.98140.99321.00430.9965
SGAI 0.98520.96440.93910.94180.94390.95630.96580.96260.9690.9731
LVGI 0.98041.01191.02860.9981.01250.94810.95551.00981.05091.1398
TATA -0.002-0.0446-0.1049-0.057-0.04060.02370.0463-0.0184-0.01680.0103
M-score -2.36-2.68-2.94-2.92-2.76-2.34-2.21-3.29-2.47-2.40
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