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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 -2.59.
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 * 0.8558||+||0.528 * 1.0139||+||0.404 * 1.04||+||0.892 * 1.0085||+||0.115 * 0.6775|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0368||+||4.679 * -0.0572||-||0.327 * 0.9484|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|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.
Net Income was -4.399 + -12.947 + 14.995 + 27.199 = $24.8 Mil.
Non Operating Income was -7.982 + -0.182 + 0.061 + 1.097 = $-7.0 Mil.
Cash Flow from Operations was 8.718 + 18.094 + 46.714 + 56.722 = $130.2 Mil.
|Accounts Receivable was $69.7 Mil.
Revenue was 84.542 + 82.164 + 137.5 + 176.763 = $481.0 Mil.
Gross Profit was 43.896 + 42.154 + 61.3 + 89.306 = $236.7 Mil.
Total Current Assets was $216.6 Mil.
Total Assets was $1,795.8 Mil.
Property, Plant and Equipment(Net PPE) was $1,101.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.5 Mil.
Selling, General & Admin. Expense(SGA) was $92.6 Mil.
Total Current Liabilities was $136.0 Mil.
Long-Term Debt was $445.2 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)|
|=||(60.128 / 485.041)||/||(69.669 / 480.969)|
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)|
|=||(41.07 / 480.969)||/||(43.947 / 485.041)|
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 - (200.301 + 1044.429) / 1721.485)||/||(1 - (216.593 + 1100.968) / 1795.758)|
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))|
|=||(54.536 / (54.536 + 1100.968))||/||(78.209 / (78.209 + 1044.429))|
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)|
|=||(96.817 / 485.041)||/||(92.595 / 480.969)|
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)|
|=||((390 + 138.414) / 1721.485)||/||((445.178 + 136.017) / 1795.758)|
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|
|=||(24.848 - -7.006||-||130.248)||/||1721.485|
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 -2.88 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