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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: -3.32   Max: 2.38
Current: -2.4

-3.32
2.38

During the past 13 years, the highest Beneish M-Score of Pool Corp was 2.38. The lowest was -3.32. 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 * 1.0596+0.528 * 0.9976+0.404 * 0.9507+0.892 * 1.0807+0.115 * 0.9926
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9864+4.679 * 0.0099-0.327 * 1.2116
=-2.40

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $207 Mil.
Revenue was 615.536 + 848.24 + 406.344 + 340.789 = $2,211 Mil.
Gross Profit was 176.244 + 246.976 + 114.1 + 95.793 = $633 Mil.
Total Current Assets was $652 Mil.
Total Assets was $909 Mil.
Property, Plant and Equipment(Net PPE) was $57 Mil.
Depreciation, Depletion and Amortization(DDA) was $16 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $232 Mil.
Long-Term Debt was $391 Mil.
Net Income was 34.836 + 73.863 + 4.188 + -4.975 = $108 Mil.
Non Operating Income was 0 + 0 + 0 + 10.478 = $10 Mil.
Cash Flow from Operations was 88.108 + -13.543 + -37.345 + 51.242 = $88 Mil.
Accounts Receivable was $181 Mil.
Revenue was 578.157 + 790.392 + 370.362 + 306.818 = $2,046 Mil.
Gross Profit was 162.557 + 228.166 + 104.761 + 88.938 = $584 Mil.
Total Current Assets was $584 Mil.
Total Assets was $827 Mil.
Property, Plant and Equipment(Net PPE) was $52 Mil.
Depreciation, Depletion and Amortization(DDA) was $14 Mil.
Selling, General & Admin. Expense(SGA) was $422 Mil.
Total Current Liabilities was $208 Mil.
Long-Term Debt was $260 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)
=(207.165 / 2210.909) / (180.898 / 2045.729)
=0.09370128 / 0.08842716
=1.0596

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)
=(246.976 / 2045.729) / (176.244 / 2210.909)
=0.28567909 / 0.28635869
=0.9976

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 - (651.89 + 57.26) / 909.236) / (1 - (583.932 + 51.537) / 826.874)
=0.22005948 / 0.23148025
=0.9507

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
=2210.909 / 2045.729
=1.0807

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))
=(14.071 / (14.071 + 51.537)) / (15.782 / (15.782 + 57.26))
=0.2144708 / 0.21606747
=0.9926

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)
=(450.325 / 2210.909) / (422.419 / 2045.729)
=0.20368319 / 0.20648825
=0.9864

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)
=((391.12 + 232.351) / 909.236) / ((260.432 + 207.529) / 826.874)
=0.68570866 / 0.56593991
=1.2116

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
=(107.912 - 10.478 - 88.462) / 909.236
=0.0099

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 1.02651.22660.29310.87680.38966.84371.00550.96410.96050.1168
GMI 0.96381.01570.98511.02740.95270.9891.00010.98521.02081.0214
AQI 1.00520.93471.06050.97251.0431.02231.02420.90380.8910.9613
SGI 1.13411.18451.231.00970.9250.86331.0481.11131.08961.0643
DEPI 0.7481.28570.99830.95591.00261.0770.99631.25690.99030.9932
SGAI 0.99870.9591.03671.0551.0891.04690.97720.98860.93830.9626
LVGI 1.00241.18711.02131.1540.9480.91550.90721.06331.02471.0098
TATA 0.03090.05980.0315-0.0039-0.0417-0.0881-0.0499-0.0039-0.0475-0.0094
M-score -2.24-1.87-2.77-2.66-3.312.39-2.62-2.47-2.69-3.28

Pool Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.92011.00490.96050.87610.98720.96640.11681.03991.00121.0596
GMI 1.00721.01891.02081.02221.02171.0211.02141.01891.00820.9976
AQI 0.95450.91910.8910.89120.88760.90990.96130.9690.96860.9507
SGI 1.10341.08691.08961.06511.05411.06681.06431.07811.08921.0807
DEPI 1.05171.01540.99030.95351.00110.98140.99321.00430.99650.9926
SGAI 0.9680.94260.93830.94030.95280.96210.96260.9690.97310.9864
LVGI 1.01191.0041.02471.01250.94810.97881.00981.05091.13981.2116
TATA -0.0446-0.1056-0.0475-0.03290.03110.0593-0.0184-0.01680.01030.0099
M-score -2.68-2.90-2.69-2.72-2.31-2.19-3.32-2.47-2.40-2.40
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