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Sonic Corp (NAS:SONC)
Beneish M-Score
-3.43 (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 -3.43 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: -3.43

-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 * 0.5539+0.528 * 0.7075+0.404 * 0.9484+0.892 * 1.0418+0.115 * 0.9378
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0545+4.679 * -0.0723-0.327 * 1.1471
=-3.43

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $20.4 Mil.
Revenue was 165.239 + 133.16 + 145.803 + 175.266 = $619.5 Mil.
Gross Profit was 70.796 + 51.488 + 57.585 + 73.989 = $253.9 Mil.
Total Current Assets was $171.6 Mil.
Total Assets was $679.7 Mil.
Property, Plant and Equipment(Net PPE) was $391.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.7 Mil.
Selling, General & Admin. Expense(SGA) was $84.1 Mil.
Total Current Liabilities was $72.9 Mil.
Long-Term Debt was $596.1 Mil.
Net Income was 15.353 + 10.819 + 12.458 + 26.296 = $64.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 39.474 + 12.99 + 25.768 + 35.86 = $114.1 Mil.
Accounts Receivable was $35.4 Mil.
Revenue was 164.748 + 126.219 + 139.856 + 163.769 = $594.6 Mil.
Gross Profit was 68.168 + 46.587 + 53.407 + 4.222 = $172.4 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.



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)
=(20.401 / 619.468) / (35.35 / 594.592)
=0.0329331 / 0.05945253
=0.5539

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)
=(172.384 / 594.592) / (253.858 / 619.468)
=0.28991981 / 0.40980002
=0.7075

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 - (171.565 + 391.629) / 679.666) / (1 - (80.107 + 430.308) / 622.985)
=0.17136652 / 0.18069456
=0.9484

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
=619.468 / 594.592
=1.0418

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))
=(45.757 / (45.757 + 430.308)) / (44.719 / (44.719 + 391.629))
=0.09611503 / 0.10248471
=0.9378

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)
=(84.053 / 619.468) / (76.51 / 594.592)
=0.13568578 / 0.12867647
=1.0545

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)
=((596.066 + 72.9) / 679.666) / ((452.855 + 81.713) / 622.985)
=0.98425697 / 0.85807523
=1.1471

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
=(64.926 - 0 - 114.092) / 679.666
=-0.0723

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 -3.43 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 1.01680.5162.3421.0350.85230.84171.13750.97131.08860.9821
GMI 0.99951.70741.12720.96080.93161.02010.96750.98230.96540.9527
AQI 0.99381.09940.88250.80411.06871.15391.07410.94980.95511.0489
SGI 1.11271.11141.04440.89320.76650.9910.99590.99791.0181.0973
DEPI 0.88710.92260.96841.0471.04880.98360.94240.94181.05280.8877
SGAI 1.02190.23210.99731.15941.37650.98041.00761.01521.03281.0416
LVGI 1.28663.08410.93530.90860.97990.92880.98330.95541.011.0633
TATA -0.0764-0.0669-0.0799-0.0537-0.0761-0.0616-0.0867-0.0707-0.0855-0.1159
M-score -2.83-3.28-1.54-2.89-3.24-2.82-2.75-2.86-2.82-3.00

Sonic Corp Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1.04491.01431.08861.02151.00251.77440.98211.08060.85240.5539
GMI 0.99020.88541.19391.1731.16121.43230.77030.78260.78940.7075
AQI 0.89260.87290.95510.98390.96211.01841.04891.02551.01380.9484
SGI 1.0081.02371.0181.04111.07421.08621.09731.08221.06351.0418
DEPI 1.08281.06381.05281.00010.92550.90920.88770.93140.96250.9378
SGAI 1.02321.01811.03281.02231.01581.03561.04161.05761.07711.0545
LVGI 0.99140.991.011.03141.06451.0471.06331.13941.05981.1471
TATA -0.1018-0.0971-0.0855-0.0926-0.1136-0.122-0.1159-0.0999-0.0796-0.0723
M-score -2.95-3.00-2.70-2.79-2.91-2.06-3.09-2.97-3.07-3.43
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