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Pool Corp (NAS:POOL)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

POOL' s 10-Year Beneish M-Score Range
Min: -3.25   Max: -1.14
Current: -2.39

-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 * 1.1487+0.528 * 0.9928+0.404 * 0.949+0.892 * 1.0802+0.115 * 0.9936
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9881+4.679 * -0.0125-0.327 * 1.1049
=-2.39

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was -2.195 + 34.836 + 73.863 + 4.188 = $111 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 84.595 + 88.108 + -13.543 + -37.345 = $122 Mil.
Accounts Receivable was $14 Mil.
Revenue was 340.789 + 578.157 + 790.392 + 370.362 = $2,080 Mil.
Gross Profit was 95.793 + 162.557 + 228.166 + 104.761 = $591 Mil.
Total Current Assets was $578 Mil.
Total Assets was $824 Mil.
Property, Plant and Equipment(Net PPE) was $52 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $426 Mil.
Total Current Liabilities was $264 Mil.
Long-Term Debt was $246 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)
=(17.558 / 2246.562) / (14.15 / 2079.7)
=0.0078155 / 0.00680387
=1.1487

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)
=(176.244 / 2079.7) / (106.02 / 2246.562)
=0.28430879 / 0.28636646
=0.9928

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 - (637.213 + 56.475) / 892.937) / (1 - (577.749 + 52.328) / 823.761)
=0.22313892 / 0.23512159
=0.949

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
=2246.562 / 2079.7
=1.0802

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))
=(14.596 / (14.596 + 52.328)) / (15.882 / (15.882 + 56.475))
=0.21809814 / 0.219495
=0.9936

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)
=(454.47 / 2246.562) / (425.791 / 2079.7)
=0.20229577 / 0.20473674
=0.9881

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)
=((319.309 + 291.908) / 892.937) / ((246.418 + 263.906) / 823.761)
=0.68450182 / 0.61950493
=1.1049

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
=(110.692 - 0 - 121.815) / 892.937
=-0.0125

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 -2.39 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.22660.29310.87682.76110.96581.00550.96840.72380.15431.1487
GMI 1.01570.98511.02740.95270.9891.00010.98521.02081.02140.9928
AQI 0.9691.0230.97251.0431.02231.02420.84330.9550.96130.949
SGI 1.18451.231.00970.9250.86331.0481.11131.08961.06431.0802
DEPI 1.32050.96920.95591.00261.0770.99631.25690.99030.99320.9936
SGAI 0.95481.01961.0551.0891.04690.97720.98490.94180.96260.9881
LVGI 1.17191.03461.1540.9480.91550.90721.09170.9981.00981.1049
TATA 0.05340.0315-0.0039-0.0417-0.1266-0.0499-0.004-0.0475-0.0094-0.0125
M-score -1.87-2.79-2.66-1.13-3.19-2.62-2.50-2.87-3.25-2.39

Pool Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.99880.72380.87610.98720.97240.15431.03991.00121.05961.1487
GMI 1.01891.02081.02221.02171.0211.02141.01891.00820.99760.9928
AQI 0.85540.9550.89120.88760.97770.96130.9690.96860.95070.949
SGI 1.08691.08961.06511.05411.06681.06431.07811.08921.08071.0802
DEPI 1.01540.99030.95351.00110.98140.99321.00430.99650.99260.9936
SGAI 0.93910.94180.94390.95630.96580.96260.9690.97310.98640.9881
LVGI 1.02860.9981.01250.94810.95551.00981.05091.13981.21161.1049
TATA -0.1049-0.057-0.04060.02370.0426-0.0094-0.00950.01730.0214-0.0125
M-score -2.94-2.92-2.76-2.34-2.23-3.25-2.43-2.37-2.34-2.39
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