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Pool Corp (NAS:POOL)
Beneish M-Score
-2.33 (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 -2.44 suggests that the company is not a manipulator.

POOL' s 10-Year Beneish M-Score Range
Min: -3.25   Max: 0.37
Current: -2.33

-3.25
0.37

During the past 13 years, the highest Beneish M-Score of Pool Corp was 0.37. The lowest was -3.25. 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 * 0.9845+0.528 * 0.9977+0.404 * 0.9696+0.892 * 1.0555+0.115 * 1.052
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9713+4.679 * 0.0026-0.327 * 1.0237
=-2.44

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $318 Mil.
Revenue was 851.855 + 450.43 + 376.442 + 615.536 = $2,294 Mil.
Gross Profit was 248.26 + 124.801 + 106.02 + 176.244 = $655 Mil.
Total Current Assets was $845 Mil.
Total Assets was $1,112 Mil.
Property, Plant and Equipment(Net PPE) was $65 Mil.
Depreciation, Depletion and Amortization(DDA) was $16 Mil.
Selling, General & Admin. Expense(SGA) was $453 Mil.
Total Current Liabilities was $321 Mil.
Long-Term Debt was $492 Mil.
Net Income was 77.924 + 8.419 + -2.195 + 34.836 = $119 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1.007 + -57.653 + 84.595 + 88.108 = $116 Mil.
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.



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)
=(318.498 / 2294.263) / (306.5 / 2173.53)
=0.13882367 / 0.14101485
=0.9845

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)
=(124.801 / 2173.53) / (248.26 / 2294.263)
=0.28498617 / 0.28563639
=0.9977

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 - (845.134 + 65.151) / 1111.582) / (1 - (801.041 + 57.275) / 1055.448)
=0.18109055 / 0.18677566
=0.9696

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
=2294.263 / 2173.53
=1.0555

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))
=(15.353 / (15.353 + 57.275)) / (16.384 / (16.384 + 65.151))
=0.2113923 / 0.20094438
=1.052

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)
=(452.869 / 2294.263) / (441.72 / 2173.53)
=0.19739193 / 0.20322701
=0.9713

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)
=((491.82 + 320.778) / 1111.582) / ((430.971 + 322.749) / 1055.448)
=0.73102839 / 0.71412329
=1.0237

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
=(118.984 - 0 - 116.057) / 1111.582
=0.0026

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 -2.44 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.87610.98720.97240.15431.03991.00121.05961.14871.04450.9845
GMI 1.02221.02171.0211.02141.01891.00820.99760.99280.99430.9977
AQI 0.89120.88760.97770.96130.9690.96860.95070.9490.97120.9696
SGI 1.06511.05411.06681.06431.07811.08921.08071.08021.08271.0555
DEPI 0.95351.00110.98140.99321.00430.99650.99260.99361.04071.052
SGAI 0.94390.95630.96580.96260.9690.97310.98640.98810.97650.9713
LVGI 1.01250.94810.95551.00981.05091.13981.21161.10491.03841.0237
TATA -0.04060.02370.0426-0.0094-0.00950.01730.0214-0.01250.01240.0026
M-score -2.76-2.34-2.23-3.25-2.43-2.37-2.34-2.39-2.33-2.44
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