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Sonic Corp (NAS:SONC)
Beneish M-Score
-2.88 (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 -2.88 suggests that the company is not a manipulator.

SONC' s Beneish M-Score Range Over the Past 10 Years
Min: -8.32   Max: -0.97
Current: -2.88

-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 -3.07.


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 * 1.0806+0.528 * 0.9459+0.404 * 1.0255+0.892 * 1.0822+0.115 * 0.9314
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0576+4.679 * -0.0999-0.327 * 1.1394
=-2.88

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $32.9 Mil.
Revenue was 145.803 + 175.266 + 164.748 + 126.219 = $612.0 Mil.
Gross Profit was 57.585 + 8.505 + 91.123 + 46.587 = $203.8 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.
Net Income was 12.458 + 26.296 + 20.442 + 7.662 = $66.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 25.768 + 35.86 + 43.719 + 23.084 = $128.4 Mil.
Accounts Receivable was $28.2 Mil.
Revenue was 139.856 + 163.769 + 152.187 + 109.741 = $565.6 Mil.
Gross Profit was 53.407 + 4.222 + 82.275 + 38.23 = $178.1 Mil.
Total Current Assets was $90.3 Mil.
Total Assets was $641.6 Mil.
Property, Plant and Equipment(Net PPE) was $436.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.8 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $75.7 Mil.
Long-Term Debt was $447.5 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)
=(32.918 / 612.036) / (28.15 / 565.553)
=0.05378442 / 0.04977429
=1.0806

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)
=(8.505 / 565.553) / (57.585 / 612.036)
=0.31497313 / 0.33298695
=0.9459

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 - (86.706 + 416.65) / 616.117) / (1 - (90.344 + 436.768) / 641.617)
=0.18301881 / 0.17846316
=1.0255

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
=612.036 / 565.553
=1.0822

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))
=(43.836 / (43.836 + 436.768)) / (45.231 / (45.231 + 416.65))
=0.09121023 / 0.09792782
=0.9314

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)
=(81.488 / 612.036) / (71.198 / 565.553)
=0.13314249 / 0.12589094
=1.0576

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)
=((493.135 + 79.278) / 616.117) / ((447.509 + 75.679) / 641.617)
=0.92906542 / 0.81542104
=1.1394

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
=(66.858 - 0 - 128.431) / 616.117
=-0.0999

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 -2.88 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

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
DSRI 1.01680.5162.3421.05330.83750.84171.13750.97131.08860.9821
GMI 1.89320.90141.12720.9330.95941.02520.96270.98230.96540.9527
AQI 0.99381.09940.88250.80411.06871.15391.07410.94980.95511.0489
SGI 1.11271.11141.04440.87770.780.9910.99590.99791.0181.0973
DEPI 0.88710.92261.07120.94651.04880.98360.94240.94181.05280.8877
SGAI 0.2261.01540.99731.17991.35260.98041.00761.01521.03281.0416
LVGI 1.28663.08410.93530.90860.97990.92880.98330.95541.011.0633
TATA -0.076-0.0654-0.0799-0.0642-0.0761-0.0616-0.1322-0.0707-0.0855-0.1159
M-score -2.22-3.84-1.53-2.96-3.22-2.82-2.97-2.86-2.82-3.00

Sonic Corp Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 0.97131.11131.04491.01431.08861.02151.00251.77440.98211.0806
GMI 0.98230.98790.99020.88541.19391.1731.16121.2640.93440.9459
AQI 0.94980.88270.89260.87290.95510.98390.96211.01841.04891.0255
SGI 0.99791.00331.0081.02371.0181.04111.07421.08621.09731.0822
DEPI 0.94181.04491.08281.06381.05281.00010.92550.90920.88770.9314
SGAI 1.01521.0121.02321.01811.03281.02231.01581.03561.04161.0576
LVGI 0.95540.92780.99140.991.011.03141.06451.0471.06331.1394
TATA -0.0707-0.0882-0.0947-0.0901-0.0855-0.0926-0.1136-0.122-0.1159-0.0999
M-score -2.86-2.81-2.91-2.97-2.70-2.79-2.91-2.15-3.01-2.88
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