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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 -2.10. The lowest was -3.26. And the median was -2.57.
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 * 0.9999||+||0.528 * 1.0169||+||0.404 * 1.0353||+||0.892 * 1.0076||+||0.115 * 0.6802|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0475||+||4.679 * -0.0561||-||0.327 * 0.9277|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $34.9 Mil.|
Revenue was 84.053 + 139.837 + 175.877 + 84.542 = $484.3 Mil.
Gross Profit was 41.07 + 62.604 + 87.776 + 43.896 = $235.3 Mil.
Total Current Assets was $189.2 Mil.
Total Assets was $1,718.3 Mil.
Property, Plant and Equipment(Net PPE) was $1,052.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $78.4 Mil.
Selling, General & Admin. Expense(SGA) was $96.8 Mil.
Total Current Liabilities was $105.6 Mil.
Long-Term Debt was $397.7 Mil.
Net Income was -12.947 + 14.995 + 27.199 + 1.867 = $31.1 Mil.
Non Operating Income was -0.182 + 0.061 + 1.097 + 1.261 = $2.2 Mil.
Cash Flow from Operations was 18.094 + 46.714 + 56.946 + 3.524 = $125.3 Mil.
|Accounts Receivable was $34.6 Mil.
Revenue was 82.164 + 137.5 + 176.763 + 84.222 = $480.6 Mil.
Gross Profit was 42.154 + 61.3 + 89.306 + 44.746 = $237.5 Mil.
Total Current Assets was $202.2 Mil.
Total Assets was $1,786.3 Mil.
Property, Plant and Equipment(Net PPE) was $1,105.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.7 Mil.
Selling, General & Admin. Expense(SGA) was $91.7 Mil.
Total Current Liabilities was $111.0 Mil.
Long-Term Debt was $453.1 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)|
|=||(34.855 / 484.309)||/||(34.594 / 480.649)|
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)|
|=||(62.604 / 480.649)||/||(41.07 / 484.309)|
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 - (189.224 + 1052.153) / 1718.267)||/||(1 - (202.208 + 1105.177) / 1786.26)|
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))|
|=||(54.725 / (54.725 + 1105.177))||/||(78.426 / (78.426 + 1052.153))|
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)|
|=||(96.762 / 484.309)||/||(91.676 / 480.649)|
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)|
|=||((397.747 + 105.631) / 1718.267)||/||((453.142 + 110.954) / 1786.26)|
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|
|=||(31.114 - 2.237||-||125.278)||/||1718.267|
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 -2.73 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