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GuruFocus has detected 2 Warning Signs with Speedway Motorsports Inc $TRK.
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Speedway Motorsports Inc (NYSE:TRK)
Beneish M-Score
-2.89 (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.

Speedway Motorsports Inc has a M-score of -2.89 suggests that the company is not a manipulator.

TRK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.1   Max: -2.1
Current: -2.89

-3.1
-2.1

During the past 13 years, the highest Beneish M-Score of Speedway Motorsports Inc was -2.10. The lowest was -3.10. And the median was -2.63.


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 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 * 0.7174+0.528 * 1.0818+0.404 * 1.033+0.892 * 1.0316+0.115 * 1.1112
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9877+4.679 * -0.05-0.327 * 1.0495
=-2.89

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $29.4 Mil.
Revenue was 82.631 + 170.661 + 175.688 + 83.176 = $512.2 Mil.
Gross Profit was 38.103 + 64.002 + 83.525 + 42.229 = $227.9 Mil.
Total Current Assets was $127.9 Mil.
Total Assets was $1,503.3 Mil.
Property, Plant and Equipment(Net PPE) was $1,000.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.4 Mil.
Selling, General & Admin. Expense(SGA) was $100.1 Mil.
Total Current Liabilities was $94.7 Mil.
Long-Term Debt was $333.2 Mil.
Net Income was 0.271 + 13.666 + 24.747 + 0.861 = $39.5 Mil.
Non Operating Income was 0.111 + 0.941 + 0.013 + -0.068 = $1.0 Mil.
Cash Flow from Operations was 5.861 + 30.92 + 51.351 + 25.641 = $113.8 Mil.
Accounts Receivable was $39.8 Mil.
Revenue was 87.745 + 144.123 + 179.321 + 85.274 = $496.5 Mil.
Gross Profit was 42.207 + 64.318 + 88.465 + 43.947 = $238.9 Mil.
Total Current Assets was $142.9 Mil.
Total Assets was $1,532.8 Mil.
Property, Plant and Equipment(Net PPE) was $1,019.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $62.0 Mil.
Selling, General & Admin. Expense(SGA) was $98.3 Mil.
Total Current Liabilities was $108.4 Mil.
Long-Term Debt was $307.3 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)
=(29.444 / 512.156) / (39.783 / 496.463)
=0.0574903 / 0.08013286
=0.7174

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)
=(238.937 / 496.463) / (227.859 / 512.156)
=0.48127856 / 0.44490155
=1.0818

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 - (127.909 + 1000.23) / 1503.3) / (1 - (142.886 + 1019.65) / 1532.833)
=0.24955831 / 0.24157687
=1.033

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
=512.156 / 496.463
=1.0316

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))
=(61.964 / (61.964 + 1019.65)) / (54.368 / (54.368 + 1000.23))
=0.05728846 / 0.05155329
=1.1112

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)
=(100.144 / 512.156) / (98.289 / 496.463)
=0.19553417 / 0.1979785
=0.9877

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)
=((333.206 + 94.671) / 1503.3) / ((307.342 + 108.369) / 1532.833)
=0.28462516 / 0.27120436
=1.0495

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
=(39.545 - 0.997 - 113.773) / 1503.3
=-0.05

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 -2.89 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 local exchange's currency.

Speedway Motorsports Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.82560.92761.05181.15230.92060.95260.96970.99991.11340.7174
GMI 0.96351.0321.03151.05671.00771.0171.01941.01691.00971.0818
AQI 0.81422.00470.92041.00760.94291.00950.8881.04980.85841.033
SGI 0.98991.08790.9010.91231.00720.9690.98061.00761.02511.0316
DEPI 0.92560.99960.90560.99010.98430.95150.97710.68021.21091.1112
SGAI 1.0470.95461.11281.11521.03541.04381.03411.04750.99090.9877
LVGI 0.9971.07450.97310.93590.94530.92550.96040.94070.91291.0495
TATA -0.0233-0.0476-0.0981-0.0585-0.0446-0.04470.0036-0.0566-0.0279-0.05
M-score -2.87-2.28-3.02-2.66-2.76-2.74-2.54-2.73-2.48-2.89

Speedway Motorsports Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.15250.99990.85580.88111.04131.11340.90050.9380.96050.7174
GMI 1.0091.01691.01391.01341.01561.00971.01141.02111.07611.0818
AQI 1.00461.04981.040.87910.88740.85840.87051.02171.01161.033
SGI 1.00391.00761.00851.01751.02151.02511.01921.00461.04971.0316
DEPI 0.95620.68020.67750.71460.65271.21091.2251.19391.43021.1112
SGAI 1.0581.04751.03681.0071.00110.99091.0061.04150.98830.9877
LVGI 0.86910.94070.94840.96590.95350.91290.93950.90140.88691.0495
TATA -0.0161-0.0565-0.0568-0.0374-0.0301-0.0279-0.0399-0.062-0.0627-0.05
M-score -2.38-2.73-2.87-2.81-2.63-2.48-2.74-2.76-2.63-2.89
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