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Sonic Corp (NAS:SONC)
Beneish M-Score
-2.15 (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.

Sonic Corp has a M-score of -2.15 signals that the company is a manipulator.

SONC' s 10-Year Beneish M-Score Range
Min: -8.32   Max: -0.97
Current: -2.15

-8.32
-0.97

During the past 13 years, the highest Beneish M-Score of Sonic Corp was -0.97. The lowest was -8.32. And the median was -3.08.


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 Sonic 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 * 1.7744+0.528 * 1.264+0.404 * 1.0184+0.892 * 1.0862+0.115 * 0.9092
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0356+4.679 * -0.122-0.327 * 1.047
=-2.15

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $35.4 Mil.
Revenue was 164.748 + 126.219 + 139.856 + 163.769 = $594.6 Mil.
Gross Profit was 91.123 + 46.587 + 53.407 + 4.222 = $195.3 Mil.
Total Current Assets was $80.1 Mil.
Total Assets was $623.0 Mil.
Property, Plant and Equipment(Net PPE) was $430.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.8 Mil.
Selling, General & Admin. Expense(SGA) was $76.5 Mil.
Total Current Liabilities was $81.7 Mil.
Long-Term Debt was $452.9 Mil.
Net Income was 20.442 + 7.662 + 10.085 + 18.825 = $57.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 43.719 + 23.084 + 33.699 + 32.49 = $133.0 Mil.
Accounts Receivable was $18.3 Mil.
Revenue was 152.187 + 109.741 + 126.652 + 158.802 = $547.4 Mil.
Gross Profit was 82.275 + 38.23 + 45.269 + 61.527 = $227.3 Mil.
Total Current Assets was $99.1 Mil.
Total Assets was $641.4 Mil.
Property, Plant and Equipment(Net PPE) was $428.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.0 Mil.
Selling, General & Admin. Expense(SGA) was $68.0 Mil.
Total Current Liabilities was $71.9 Mil.
Long-Term Debt was $453.7 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)
=(35.35 / 594.592) / (18.34 / 547.382)
=0.05945253 / 0.03350494
=1.7744

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)
=(46.587 / 547.382) / (91.123 / 594.592)
=0.41525114 / 0.32852612
=1.264

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 - (80.107 + 430.308) / 622.985) / (1 - (99.135 + 428.432) / 641.359)
=0.18069456 / 0.17742325
=1.0184

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
=594.592 / 547.382
=1.0862

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))
=(41.027 / (41.027 + 428.432)) / (45.757 / (45.757 + 430.308))
=0.08739208 / 0.09611503
=0.9092

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)
=(76.51 / 594.592) / (68.012 / 547.382)
=0.12867647 / 0.12424961
=1.0356

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)
=((452.855 + 81.713) / 622.985) / ((453.713 + 71.937) / 641.359)
=0.85807523 / 0.81958778
=1.047

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
=(57.014 - 0 - 132.992) / 622.985
=-0.122

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.

Sonic Corp has a M-score of -2.15 signals that the company is likely to 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.

Sonic Corp Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
DSRI 0.8951.01680.5162.3421.05330.83750.84171.13750.97131.0886
GMI 1.01321.89320.90141.12720.9330.95941.02520.96270.98230.9654
AQI 0.89940.99381.09940.88250.80411.06871.15391.07410.94980.9551
SGI 1.16151.11271.11141.04440.87770.780.9910.99590.99791.018
DEPI 0.9830.88710.92261.07120.94651.04880.98360.94240.94181.0528
SGAI 1.02330.2261.01540.99731.17991.35260.98041.00761.01521.0328
LVGI 0.87471.28663.08410.93530.90860.97990.92880.98330.95541.01
TATA -0.1091-0.076-0.0654-0.0799-0.0642-0.0761-0.0616-0.1322-0.0707-0.0855
M-score -2.94-2.22-3.84-1.53-2.96-3.22-2.82-2.97-2.86-2.82

Sonic Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 0.82790.51170.97131.11131.04491.01431.08861.02151.00251.7744
GMI 0.94130.95770.98230.98790.99020.88541.19391.1731.16121.264
AQI 1.14841.09440.94980.88270.89260.87290.95510.98390.96211.0184
SGI 0.98330.9830.99791.00331.0081.02371.0181.04111.07421.0862
DEPI 0.89190.92140.94181.04491.08281.06381.05281.00010.92550.9092
SGAI 1.02311.02741.01521.0121.02321.01811.03281.02231.01581.0356
LVGI 0.99010.96710.95540.92780.99140.991.011.03141.06451.047
TATA -0.1298-0.1222-0.0707-0.0882-0.0947-0.0901-0.0855-0.0926-0.1136-0.122
M-score -3.24-3.50-2.86-2.81-2.91-2.97-2.70-2.79-2.91-2.15
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