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Sonic Corp (NAS:SONC)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

SONC' s 10-Year Beneish M-Score Range
Min: -8.32   Max: -0.96
Current: -2.94

-8.32
-0.96

During the past 13 years, the highest Beneish M-Score of Sonic Corp was -0.96. The lowest was -8.32. And the median was -3.16.


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 * 1.2586+0.528 * 0.9793+0.404 * 0.8729+0.892 * 1.0237+0.115 * 1.0638
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0181+4.679 * -0.1415-0.327 * 0.99
=-2.94

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $43.4 Mil.
Revenue was 152.187 + 109.741 + 126.652 + 158.802 = $547.4 Mil.
Gross Profit was 60.47 + 38.23 + 45.269 + 61.527 = $205.5 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.
Net Income was 16.776 + 4.107 + 8.208 + 12.198 = $41.3 Mil.
Non Operating Income was 0 + 0 + 0 + 28.998 = $29.0 Mil.
Cash Flow from Operations was 35.138 + 7.857 + 28.063 + 31.989 = $103.0 Mil.
Accounts Receivable was $33.7 Mil.
Revenue was 146.634 + 111.141 + 126.008 + 150.94 = $534.7 Mil.
Gross Profit was 56.578 + 37.336 + 43.935 + 58.743 = $196.6 Mil.
Total Current Assets was $110.9 Mil.
Total Assets was $642.5 Mil.
Property, Plant and Equipment(Net PPE) was $401.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.1 Mil.
Selling, General & Admin. Expense(SGA) was $65.3 Mil.
Total Current Liabilities was $71.9 Mil.
Long-Term Debt was $460.0 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)
=(43.381 / 547.382) / (33.67 / 534.723)
=0.07925178 / 0.06296718
=1.2586

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)
=(38.23 / 534.723) / (60.47 / 547.382)
=0.36765204 / 0.37541607
=0.9793

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 - (99.135 + 428.432) / 641.359) / (1 - (110.948 + 400.968) / 642.504)
=0.17742325 / 0.20324854
=0.8729

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
=547.382 / 534.723
=1.0237

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))
=(41.097 / (41.097 + 400.968)) / (41.027 / (41.027 + 428.432))
=0.09296597 / 0.08739208
=1.0638

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)
=(68.012 / 547.382) / (65.261 / 534.723)
=0.12424961 / 0.12204637
=1.0181

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)
=((453.713 + 71.937) / 641.359) / ((460.039 + 71.865) / 642.504)
=0.81958778 / 0.82786099
=0.99

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
=(41.289 - 28.998 - 103.047) / 641.359
=-0.1415

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 -2.94 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

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
DSRI 0.88630.8951.01680.97651.23761.0351.20431.47960.72811.3647
GMI 0.60981.01320.99951.70741.12720.96080.93161.02010.96750.9823
AQI 0.97530.89940.99381.09940.88250.80411.06871.15391.07410.9498
SGI 1.20111.16151.11271.11141.04440.89320.76650.9910.99590.9979
DEPI 0.96780.9830.88710.92260.96841.0471.04880.98360.94240.9418
SGAI 4.09290.98991.02190.23210.99731.15941.37650.98041.00761.0152
LVGI 0.7540.87471.28663.08410.93530.90860.97990.92880.98330.9554
TATA -0.2419-0.2642-0.0831-0.0654-0.0792-0.0537-0.0761-0.0616-0.0867-0.1205
M-score -4.21-3.66-2.87-2.85-2.55-2.89-2.92-2.24-3.13-2.73

Sonic Corp Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 1.47191.02780.72810.74220.82790.97541.36471.11131.04491.2586
GMI 1.00541.00010.96750.94890.94420.9590.98230.98790.99020.9793
AQI 1.08871.04161.07411.1231.14841.09440.94980.88270.89260.8729
SGI 1.00540.98930.99590.99330.98330.9830.99791.00331.0081.0237
DEPI 0.96030.94340.94240.86650.89190.92140.94181.04491.08281.0638
SGAI 0.99341.00371.00761.03511.02311.02741.01521.0121.02321.0181
LVGI 0.95670.9490.98330.98930.99010.96710.95540.92780.99140.99
TATA -0.0625-0.0989-0.0867-0.0864-0.0802-0.074-0.1205-0.1384-0.1479-0.1415
M-score -2.28-2.90-3.13-3.12-3.01-2.85-2.73-3.05-3.16-2.94
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