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Spirit Airlines Inc (NAS:SAVE)
Beneish M-Score
-2.52 (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.

Spirit Airlines Inc has a M-score of -2.52 suggests that the company is not a manipulator.

SAVE' s 10-Year Beneish M-Score Range
Min: -2.55   Max: -1.92
Current: -2.52

-2.55
-1.92

During the past 6 years, the highest Beneish M-Score of Spirit Airlines Inc was -1.92. The lowest was -2.55. And the median was -2.38.


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 Spirit Airlines Inc 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 * 0.7929+0.528 * 0.8461+0.404 * 1.2094+0.892 * 1.2012+0.115 * 0.9865
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9982+4.679 * -0.0097-0.327 * 0.9487
=-2.52

* 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 $27 Mil.
Revenue was 519.769 + 499.337 + 437.987 + 419.984 = $1,877 Mil.
Gross Profit was 250.819 + 251.227 + 201.499 + 197.176 = $901 Mil.
Total Current Assets was $704 Mil.
Total Assets was $1,414 Mil.
Property, Plant and Equipment(Net PPE) was $53 Mil.
Depreciation, Depletion and Amortization(DDA) was $66 Mil.
Selling, General & Admin. Expense(SGA) was $667 Mil.
Total Current Liabilities was $395 Mil.
Long-Term Debt was $0 Mil.
Net Income was 67 + 64.849 + 37.706 + 43.193 = $213 Mil.
Non Operating Income was -0.081 + -1.439 + -0.037 + -0.031 = $-2 Mil.
Cash Flow from Operations was 62.16 + 53.496 + 90.639 + 21.745 = $228 Mil.
Accounts Receivable was $28 Mil.
Revenue was 456.625 + 407.339 + 370.437 + 328.268 = $1,563 Mil.
Gross Profit was 230.491 + 193.625 + 226.991 + -16.667 = $634 Mil.
Total Current Assets was $662 Mil.
Total Assets was $1,125 Mil.
Property, Plant and Equipment(Net PPE) was $32 Mil.
Depreciation, Depletion and Amortization(DDA) was $38 Mil.
Selling, General & Admin. Expense(SGA) was $556 Mil.
Total Current Liabilities was $331 Mil.
Long-Term Debt was $0 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)
=(26.515 / 1877.077) / (27.838 / 1562.669)
=0.01412569 / 0.01781439
=0.7929

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)
=(251.227 / 1562.669) / (250.819 / 1877.077)
=0.40599769 / 0.47985298
=0.8461

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 - (704.124 + 53.395) / 1413.554) / (1 - (661.844 + 31.513) / 1125.139)
=0.46410325 / 0.38375881
=1.2094

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
=1877.077 / 1562.669
=1.2012

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))
=(37.659 / (37.659 + 31.513)) / (65.75 / (65.75 + 53.395))
=0.54442549 / 0.55184859
=0.9865

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)
=(666.617 / 1877.077) / (555.964 / 1562.669)
=0.35513567 / 0.35577848
=0.9982

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)
=((0 + 394.817) / 1413.554) / ((0 + 331.271) / 1125.139)
=0.27930804 / 0.29442673
=0.9487

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
=(212.748 - -1.588 - 228.04) / 1413.554
=-0.0097

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.

Spirit Airlines Inc has a M-score of -2.52 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.

Spirit Airlines Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.19780.8146
GMI 1.00590.9306
AQI 0.99681.1231
SGI 1.23081.2549
DEPI 0.71710.739
SGAI 0.98450.9529
LVGI 0.98870.9453
TATA -0.0053-0.0154
M-score -2.14-2.49

Spirit Airlines Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.23241.29641.19780.79791.09950.94770.81461.110.91190.7929
GMI 1.12061.03840.97480.97021.08441.12090.86430.94870.86780.8461
AQI 1.03331.04020.99681.11351.0541.05981.12311.19781.27841.2094
SGI 1.29821.24431.23081.21691.19661.23631.25491.24121.25241.2012
DEPI 0.66980.57450.75550.76080.64290.74650.77930.79390.83330.9865
SGAI 0.7740.79510.92250.97491.03951.02230.95290.96860.95720.9982
LVGI 0.92570.91470.98870.95551.02620.97260.94530.95110.86360.9487
TATA -0.13890.003-0.0053-0.0031-0.0244-0.0398-0.0154-0.01270.0024-0.0097
M-score -2.55-1.92-2.14-2.47-2.32-2.44-2.52-2.17-2.25-2.52
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