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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 -3.13. And the median was -2.59.
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 * 0.9005||+||0.528 * 1.0114||+||0.404 * 0.8705||+||0.892 * 1.0192||+||0.115 * 1.225|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.006||+||4.679 * -0.04||-||0.327 * 0.9395|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $55.2 Mil.|
Revenue was 83.176 + 87.745 + 144.123 + 179.321 = $494.4 Mil.
Gross Profit was 42.229 + 42.207 + 64.318 + 88.465 = $237.2 Mil.
Total Current Assets was $156.9 Mil.
Total Assets was $1,561.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,028.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $62.0 Mil.
Selling, General & Admin. Expense(SGA) was $99.3 Mil.
Total Current Liabilities was $138.8 Mil.
Long-Term Debt was $311.5 Mil.
Net Income was 0.861 + -6.293 + 8.553 + -32.224 = $-29.1 Mil.
Non Operating Income was -0.068 + -0.454 + -0.749 + -98.925 = $-100.2 Mil.
Cash Flow from Operations was 25.641 + 23.525 + 28.061 + 56.277 = $133.5 Mil.
|Accounts Receivable was $60.1 Mil.
Revenue was 85.274 + 84.053 + 139.837 + 175.877 = $485.0 Mil.
Gross Profit was 43.947 + 41.07 + 62.604 + 87.776 = $235.4 Mil.
Total Current Assets was $200.3 Mil.
Total Assets was $1,721.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,044.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $78.2 Mil.
Selling, General & Admin. Expense(SGA) was $96.8 Mil.
Total Current Liabilities was $138.4 Mil.
Long-Term Debt was $390.0 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)|
|=||(55.188 / 494.365)||/||(60.128 / 485.041)|
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)|
|=||(235.397 / 485.041)||/||(237.219 / 494.365)|
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 - (156.867 + 1028.192) / 1561.487)||/||(1 - (200.301 + 1044.429) / 1721.485)|
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))|
|=||(78.209 / (78.209 + 1044.429))||/||(62 / (62 + 1028.192))|
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)|
|=||(99.272 / 494.365)||/||(96.817 / 485.041)|
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)|
|=||((311.549 + 138.77) / 1561.487)||/||((390 + 138.414) / 1721.485)|
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|
|=||(-29.103 - -100.196||-||133.504)||/||1561.487|
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 -2.74 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