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Pool Corp (NAS:POOL)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

POOL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: 4.38
Current: -2.71

-3.25
4.38

During the past 13 years, the highest Beneish M-Score of Pool Corp was 4.38. The lowest was -3.25. And the median was -2.40.


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 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 * 0.9717+0.528 * 0.991+0.404 * 0.9844+0.892 * 1.093+0.115 * 1.0144
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9666+4.679 * -0.0602-0.327 * 1.0129
=-2.71

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $233 Mil.
Revenue was 691.429 + 918.889 + 515.25 + 415.075 = $2,541 Mil.
Gross Profit was 199.551 + 270.736 + 143.023 + 118.295 = $732 Mil.
Total Current Assets was $736 Mil.
Total Assets was $1,038 Mil.
Property, Plant and Equipment(Net PPE) was $85 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $480 Mil.
Total Current Liabilities was $328 Mil.
Long-Term Debt was $389 Mil.
Net Income was 44.534 + 85.435 + 16.371 + 2.486 = $149 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 156.927 + 25.996 + -39.753 + 68.067 = $211 Mil.
Accounts Receivable was $220 Mil.
Revenue was 645.779 + 851.855 + 450.43 + 376.442 = $2,325 Mil.
Gross Profit was 184.288 + 248.26 + 124.801 + 106.02 = $663 Mil.
Total Current Assets was $676 Mil.
Total Assets was $942 Mil.
Property, Plant and Equipment(Net PPE) was $66 Mil.
Depreciation, Depletion and Amortization(DDA) was $17 Mil.
Selling, General & Admin. Expense(SGA) was $454 Mil.
Total Current Liabilities was $250 Mil.
Long-Term Debt was $393 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)
=(233.405 / 2540.643) / (219.774 / 2324.506)
=0.09186848 / 0.09454654
=0.9717

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)
=(663.369 / 2324.506) / (731.605 / 2540.643)
=0.28538064 / 0.28796057
=0.991

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 - (736.225 + 84.643) / 1037.521) / (1 - (676.183 + 66.296) / 942.396)
=0.20881794 / 0.21213694
=0.9844

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
=2540.643 / 2324.506
=1.093

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))
=(16.749 / (16.749 + 66.296)) / (21.005 / (21.005 + 84.643))
=0.20168583 / 0.19882061
=1.0144

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)
=(479.51 / 2540.643) / (453.858 / 2324.506)
=0.18873569 / 0.19524923
=0.9666

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)
=((388.891 + 327.874) / 1037.521) / ((393.067 + 249.679) / 942.396)
=0.69084385 / 0.68203388
=1.0129

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
=(148.826 - 0 - 211.237) / 1037.521
=-0.0602

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 -2.71 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 local exchange's currency.

Pool Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.29310.87682.76110.96581.00550.96840.72380.15431.14878.4875
GMI 0.98511.02740.95270.9891.00010.98521.02081.02140.99281.0016
AQI 1.0230.97251.0431.02231.02420.84330.9550.96130.9490.9725
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 1.03461.1540.9480.91550.90721.09170.9981.00981.10490.9869
TATA 0.0336-0.0028-0.0437-0.1266-0.0499-0.004-0.0475-0.0094-0.0125-0.019
M-score -2.78-2.66-1.14-3.19-2.62-2.50-2.87-3.25-2.394.38

Pool Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.00121.05961.14871.04450.98451.0098.48751.12141.01340.9717
GMI 1.00820.99760.99280.99430.99771.00341.00160.99910.99490.991
AQI 0.96860.95070.9490.96420.9630.9640.97250.92721.00850.9844
SGI 1.08921.08071.08021.08271.05551.05141.05191.05991.08751.093
DEPI 0.99650.99260.99361.04071.0521.07131.10131.07241.07431.0144
SGAI 0.97310.98640.98810.97650.97130.95860.9610.95480.96020.9666
LVGI 1.13981.21161.10491.03781.02310.99460.98691.06321.00841.0129
TATA 0.01730.0214-0.01250.01240.0026-0.0414-0.019-0.0232-0.0378-0.0602
M-score -2.37-2.34-2.39-2.33-2.45-2.624.38-2.46-2.55-2.71
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