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Sonic Corp (NAS:SONC)
Beneish M-Score
-3.24 (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 -3.24 suggests that the company is not a manipulator.

SONC' s Beneish M-Score Range Over the Past 10 Years
Min: -7.49   Max: -0.12
Current: -3.24

-7.49
-0.12

During the past 13 years, the highest Beneish M-Score of Sonic Corp was -0.12. The lowest was -7.49. And the median was -2.86.


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 * 0.5317+0.528 * 0.9648+0.404 * 1.1983+0.892 * 0.9641+0.115 * 0.9138
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0298+4.679 * -0.061-0.327 * 1.1781
=-3.24

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Nov16) TTM:Last Year (Nov15) TTM:
Accounts Receivable was $16.9 Mil.
Revenue was 129.551 + 162.118 + 165.239 + 133.16 = $590.1 Mil.
Gross Profit was 54.243 + 69.631 + 70.796 + 51.488 = $246.2 Mil.
Total Current Assets was $99.1 Mil.
Total Assets was $593.3 Mil.
Property, Plant and Equipment(Net PPE) was $364.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.7 Mil.
Selling, General & Admin. Expense(SGA) was $80.9 Mil.
Total Current Liabilities was $65.5 Mil.
Long-Term Debt was $583.9 Mil.
Net Income was 13.118 + 25.437 + 15.353 + 10.819 = $64.7 Mil.
Non Operating Income was 0 + -8.75 + 0 + 0 = $-8.8 Mil.
Cash Flow from Operations was 19.231 + 37.977 + 39.474 + 12.99 = $109.7 Mil.
Accounts Receivable was $32.9 Mil.
Revenue was 145.803 + 175.266 + 164.748 + 126.219 = $612.0 Mil.
Gross Profit was 57.585 + 73.989 + 68.168 + 46.587 = $246.3 Mil.
Total Current Assets was $86.7 Mil.
Total Assets was $616.1 Mil.
Property, Plant and Equipment(Net PPE) was $416.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.2 Mil.
Selling, General & Admin. Expense(SGA) was $81.5 Mil.
Total Current Liabilities was $79.3 Mil.
Long-Term Debt was $493.1 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)
=(16.873 / 590.068) / (32.918 / 612.036)
=0.02859501 / 0.05378442
=0.5317

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)
=(246.329 / 612.036) / (246.158 / 590.068)
=0.40247469 / 0.41716887
=0.9648

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 - (99.132 + 364.059) / 593.316) / (1 - (86.706 + 416.65) / 616.117)
=0.2193182 / 0.18301881
=1.1983

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
=590.068 / 612.036
=0.9641

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))
=(45.231 / (45.231 + 416.65)) / (43.696 / (43.696 + 364.059))
=0.09792782 / 0.10716239
=0.9138

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)
=(80.903 / 590.068) / (81.488 / 612.036)
=0.13710793 / 0.13314249
=1.0298

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)
=((583.888 + 65.519) / 593.316) / ((493.135 + 79.278) / 616.117)
=1.09453816 / 0.92906542
=1.1781

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
=(64.727 - -8.75 - 109.672) / 593.316
=-0.061

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 -3.24 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 local exchange's currency.

Sonic Corp Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 0.5162.3421.05330.83750.84171.13750.97131.08860.92861.0204
GMI 0.90141.12720.9330.95941.02520.96270.98230.96540.95270.9709
AQI 1.09940.88250.80411.06871.15391.07410.94980.95511.04890.9975
SGI 1.11141.04440.87770.780.9910.99590.99791.0181.09731.0004
DEPI 0.92261.07120.94651.04880.98360.94240.94181.05280.88770.9874
SGAI 1.01540.99731.17991.35260.98041.00761.01521.03281.04161.0343
LVGI 3.08410.93530.90860.97990.92880.98330.95541.011.06331.1718
TATA -0.0669-0.0799-0.0642-0.0761-0.0616-0.0867-0.0774-0.0855-0.1159-0.0657
M-score -3.84-1.53-2.96-3.22-2.82-2.76-2.89-2.82-3.05-2.85

Sonic Corp Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 1.08861.02151.00251.77440.92861.08060.85240.55391.02040.5317
GMI 1.19391.1731.16121.43230.77030.78260.78940.70750.97090.9648
AQI 0.95510.98390.96211.01841.04891.02551.01380.94840.99751.1983
SGI 1.0181.04111.07421.08621.09731.08221.06351.04181.00040.9641
DEPI 1.05281.00010.92550.90920.88770.93140.96250.93780.98740.9138
SGAI 1.03281.02231.01581.03561.04161.05761.07711.05451.03431.0298
LVGI 1.011.03141.06451.0471.06331.13941.05981.14711.17181.1781
TATA -0.0855-0.0926-0.1136-0.122-0.1159-0.0999-0.0796-0.0723-0.0657-0.061
M-score -2.70-2.79-2.91-2.06-3.14-2.97-3.07-3.43-2.85-3.24
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