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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.
During the past 13 years, the highest Beneish M-Score of Speedway Motorsports Inc was -1.44. The lowest was -3.26. And the median was -2.56.
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 Speedway Motorsports Inc 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 * 1.1525||+||0.528 * 1.009||+||0.404 * 1.0046||+||0.892 * 1.0039||+||0.115 * 0.9562|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.058||+||4.679 * -0.0155||-||0.327 * 0.8691|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $36.3 Mil.|
Revenue was 139.837 + 175.877 + 84.542 + 82.164 = $482.4 Mil.
Gross Profit was 62.604 + 87.776 + 43.896 + 42.154 = $236.4 Mil.
Total Current Assets was $179.1 Mil.
Total Assets was $1,740.6 Mil.
Property, Plant and Equipment(Net PPE) was $1,084.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.7 Mil.
Selling, General & Admin. Expense(SGA) was $95.8 Mil.
Total Current Liabilities was $109.7 Mil.
Long-Term Debt was $391.4 Mil.
Net Income was 14.995 + 27.199 + 1.867 + 50.427 = $94.5 Mil.
Non Operating Income was 0.061 + 1.097 + 1.261 + -0.087 = $2.3 Mil.
Cash Flow from Operations was 46.714 + 56.946 + 3.524 + 12.001 = $119.2 Mil.
|Accounts Receivable was $31.4 Mil.
Revenue was 137.5 + 176.763 + 84.222 + 82.079 = $480.6 Mil.
Gross Profit was 61.3 + 89.306 + 44.746 + 42.281 = $237.6 Mil.
Total Current Assets was $160.0 Mil.
Total Assets was $1,755.9 Mil.
Property, Plant and Equipment(Net PPE) was $1,116.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.7 Mil.
Selling, General & Admin. Expense(SGA) was $90.2 Mil.
Total Current Liabilities was $108.0 Mil.
Long-Term Debt was $473.7 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(36.274 / 482.42)||/||(31.353 / 480.564)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(87.776 / 480.564)||/||(62.604 / 482.42)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (179.104 + 1084.405) / 1740.553)||/||(1 - (160.025 + 1116.825) / 1755.879)|
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.
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))|
|=||(54.727 / (54.727 + 1116.825))||/||(55.7 / (55.7 + 1084.405))|
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)|
|=||(95.787 / 482.42)||/||(90.189 / 480.564)|
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)|
|=||((391.448 + 109.673) / 1740.553)||/||((473.694 + 107.993) / 1755.879)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(94.488 - 2.332||-||119.185)||/||1740.553|
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.
Speedway Motorsports Inc has a M-score of -2.37 suggests that the company will not be a manipulator.
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
Speedway Motorsports Inc Annual Data
Speedway Motorsports Inc Quarterly Data