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Winmark Corp (NAS:WINA)
Beneish M-Score
-3.18 (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.

Winmark Corp has a M-score of -3.18 suggests that the company is not a manipulator.

WINA' s 10-Year Beneish M-Score Range
Min: -5.87   Max: 1.42
Current: -3.18

-5.87
1.42

During the past 13 years, the highest Beneish M-Score of Winmark Corp was 1.42. The lowest was -5.87. And the median was -2.86.


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 Winmark Corp 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 * 0.8485+0.528 * 0.9885+0.404 * 0.9079+0.892 * 1.0374+0.115 * 1.2324
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0116+4.679 * -0.0177-0.327 * 2.5057
=-3.18

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1.84 Mil.
Revenue was 14.039 + 14.553 + 13.767 + 14.792 = $57.15 Mil.
Gross Profit was 13.261 + 13.491 + 13.296 + 14.223 = $54.27 Mil.
Total Current Assets was $26.32 Mil.
Total Assets was $50.72 Mil.
Property, Plant and Equipment(Net PPE) was $1.52 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.42 Mil.
Selling, General & Admin. Expense(SGA) was $23.68 Mil.
Total Current Liabilities was $32.80 Mil.
Long-Term Debt was $0.15 Mil.
Net Income was 4.281 + 4.552 + 4.586 + 5.252 = $18.67 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.599 + 6.997 + 4.611 + 7.361 = $19.57 Mil.
Accounts Receivable was $2.09 Mil.
Revenue was 14.024 + 13.148 + 13.118 + 14.799 = $55.09 Mil.
Gross Profit was 12.889 + 12.228 + 12.479 + 14.115 = $51.71 Mil.
Total Current Assets was $20.83 Mil.
Total Assets was $43.72 Mil.
Property, Plant and Equipment(Net PPE) was $1.17 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $22.56 Mil.
Total Current Liabilities was $11.34 Mil.
Long-Term Debt was $0.00 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)
=(1.837 / 57.151) / (2.087 / 55.089)
=0.03214292 / 0.03788415
=0.8485

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)
=(13.491 / 55.089) / (13.261 / 57.151)
=0.93868104 / 0.94960718
=0.9885

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 - (26.317 + 1.518) / 50.715) / (1 - (20.828 + 1.166) / 43.716)
=0.45114858 / 0.49688901
=0.9079

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
=57.151 / 55.089
=1.0374

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))
=(0.426 / (0.426 + 1.166)) / (0.421 / (0.421 + 1.518))
=0.26758794 / 0.21712223
=1.2324

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)
=(23.68 / 57.151) / (22.564 / 55.089)
=0.41434096 / 0.40959175
=1.0116

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)
=((0.15 + 32.802) / 50.715) / ((0 + 11.336) / 43.716)
=0.6497486 / 0.25931009
=2.5057

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
=(18.671 - 0 - 19.568) / 50.715
=-0.0177

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.

Winmark Corp has a M-score of -3.18 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 own currency.

Winmark Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.16281.06021.19290.72191.01360.58561.09790.53851.81930.4847
GMI 0.89580.92630.94920.98980.98260.97890.92750.99161.00460.9887
AQI 1.20411.21411.02381.04950.79550.69481.29480.92911.13430.7368
SGI 0.87070.97791.0291.13861.13671.05281.10481.24591.01181.0729
DEPI 1.69221.0331.08660.82520.73221.93671.07890.84410.94151.0933
SGAI 1.08311.27111.02490.99730.87490.92010.95730.9580.90271.0047
LVGI 0.63211.23043.84551.35110.93890.61920.81290.4492.89180.4205
TATA -0.0244-0.0707-0.0498-0.05-0.0806-0.136-0.043-0.1067-0.0325-0.0644
M-score -2.35-2.85-3.45-2.97-2.80-3.34-2.34-3.05-2.42-3.10

Winmark Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.77511.31261.1171.81940.92350.83940.8810.48470.80660.8485
GMI 0.99590.99591.0011.00461.00541.01351.01321.00541.00280.9885
AQI 1.06111.01761.19311.13430.91590.84970.69120.73680.95110.9079
SGI 1.2261.02551.07161.01181.02291.12361.05811.07291.07281.0374
DEPI 0.84690.8630.87870.94140.95940.95890.93231.09711.13681.2324
SGAI 0.97270.88070.89780.88850.88670.9550.96430.98150.99481.0116
LVGI 1.85222.18582.19012.89180.68330.49960.44220.42051.60512.5057
TATA -0.0382-0.043-0.0643-0.0336-0.0745-0.0368-0.0533-0.0644-0.068-0.0177
M-score -2.93-2.75-2.92-2.42-2.79-2.58-2.72-3.09-3.11-3.18
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