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Sonic Corp (NAS:SONC)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

SONC' s 10-Year Beneish M-Score Range
Min: -4.52   Max: -0.97
Current: -2.82

-4.52
-0.97

During the past 13 years, the highest Beneish M-Score of Sonic Corp was -0.97. The lowest was -4.52. And the median was -3.04.


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 * 1.0886+0.528 * 0.9654+0.404 * 0.9551+0.892 * 1.018+0.115 * 1.0528
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0328+4.679 * -0.0855-0.327 * 1.01
=-2.82

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $18.3 Mil.
Revenue was 163.769 + 152.187 + 109.741 + 126.652 = $552.3 Mil.
Gross Profit was 66.271 + 60.47 + 38.23 + 45.269 = $210.2 Mil.
Total Current Assets was $95.7 Mil.
Total Assets was $651.0 Mil.
Property, Plant and Equipment(Net PPE) was $442.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.2 Mil.
Selling, General & Admin. Expense(SGA) was $69.4 Mil.
Total Current Liabilities was $79.5 Mil.
Long-Term Debt was $450.6 Mil.
Net Income was 18.825 + 16.776 + 4.107 + 8.208 = $47.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 32.49 + 35.138 + 7.857 + 28.063 = $103.5 Mil.
Accounts Receivable was $16.5 Mil.
Revenue was 158.802 + 146.634 + 111.141 + 126.008 = $542.6 Mil.
Gross Profit was 61.527 + 56.578 + 37.336 + 43.935 = $199.4 Mil.
Total Current Assets was $140.7 Mil.
Total Assets was $660.8 Mil.
Property, Plant and Equipment(Net PPE) was $399.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.4 Mil.
Selling, General & Admin. Expense(SGA) was $66.0 Mil.
Total Current Liabilities was $72.9 Mil.
Long-Term Debt was $459.8 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)
=(18.292 / 552.349) / (16.506 / 542.585)
=0.03311674 / 0.03042104
=1.0886

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)
=(60.47 / 542.585) / (66.271 / 552.349)
=0.36745579 / 0.38062891
=0.9654

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 - (95.712 + 441.969) / 650.972) / (1 - (140.722 + 399.661) / 660.794)
=0.1740336 / 0.18222169
=0.9551

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
=552.349 / 542.585
=1.018

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))
=(40.387 / (40.387 + 399.661)) / (42.21 / (42.21 + 441.969))
=0.09177862 / 0.0871785
=1.0528

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)
=(69.415 / 552.349) / (66.022 / 542.585)
=0.12567236 / 0.12168047
=1.0328

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)
=((450.577 + 79.511) / 650.972) / ((459.838 + 72.93) / 660.794)
=0.8143023 / 0.80625429
=1.01

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
=(47.916 - 0 - 103.548) / 650.972
=-0.0855

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 -2.82 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.

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

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.02771.13750.74220.82790.51170.97131.11131.04491.01431.0886
GMI 0.99790.96270.94540.94130.95770.98230.98790.99020.97930.9654
AQI 1.04161.07411.1231.14841.09440.94980.88270.89260.87290.9551
SGI 0.98930.99590.99330.98330.9830.99791.00331.0081.02371.018
DEPI 0.94340.94240.86650.89190.92140.94181.04491.08281.06381.0528
SGAI 1.00371.00761.03511.02311.02741.01521.0121.02321.01811.0328
LVGI 0.9490.98330.98930.99010.96710.95540.92780.99140.991.01
TATA -0.0989-0.1322-0.1336-0.1298-0.1222-0.0707-0.0882-0.0947-0.0901-0.0855
M-score -2.90-2.97-3.35-3.24-3.50-2.86-2.81-2.91-2.92-2.82
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