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Winmark Corp (NAS:WINA)
Beneish M-Score
-3.15 (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 -3.15 suggests that the company is not a manipulator.

WINA' s 10-Year Beneish M-Score Range
Min: -5.87   Max: 3.59
Current: -3.15

-5.87
3.59

During the past 13 years, the highest Beneish M-Score of Winmark Corp was 3.59. The lowest was -5.87. And the median was -2.94.


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 * 0.929+0.528 * 0.9923+0.404 * 1.1209+0.892 * 1.0668+0.115 * 1.3181
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0133+4.679 * -0.0199-0.327 * 3.0006
=-3.15

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1.11 Mil.
Revenue was 16.404 + 14.039 + 14.553 + 13.767 = $58.76 Mil.
Gross Profit was 15.662 + 13.261 + 13.491 + 13.296 = $55.71 Mil.
Total Current Assets was $24.62 Mil.
Total Assets was $49.94 Mil.
Property, Plant and Equipment(Net PPE) was $1.50 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.41 Mil.
Selling, General & Admin. Expense(SGA) was $24.46 Mil.
Total Current Liabilities was $31.33 Mil.
Long-Term Debt was $0.09 Mil.
Net Income was 5.623 + 4.281 + 4.552 + 4.586 = $19.04 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 7.83 + 0.599 + 6.997 + 4.611 = $20.04 Mil.
Accounts Receivable was $1.12 Mil.
Revenue was 14.792 + 14.024 + 13.148 + 13.118 = $55.08 Mil.
Gross Profit was 14.223 + 12.889 + 12.228 + 12.479 = $51.82 Mil.
Total Current Assets was $27.22 Mil.
Total Assets was $49.25 Mil.
Property, Plant and Equipment(Net PPE) was $1.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $22.62 Mil.
Total Current Liabilities was $10.33 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)
=(1.107 / 58.763) / (1.117 / 55.082)
=0.01883838 / 0.02027886
=0.929

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)
=(13.261 / 55.082) / (15.662 / 58.763)
=0.94076105 / 0.94804554
=0.9923

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 - (24.624 + 1.501) / 49.941) / (1 - (27.219 + 1.074) / 49.245)
=0.47688272 / 0.42546451
=1.1209

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
=58.763 / 55.082
=1.0668

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))
=(0.428 / (0.428 + 1.074)) / (0.414 / (0.414 + 1.501))
=0.2849534 / 0.21618799
=1.3181

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)
=(24.455 / 58.763) / (22.622 / 55.082)
=0.41616323 / 0.41069678
=1.0133

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)
=((0.094 + 31.334) / 49.941) / ((0 + 10.328) / 49.245)
=0.62930258 / 0.20972688
=3.0006

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
=(19.042 - 0 - 20.037) / 49.941
=-0.0199

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 -3.15 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 0.99110.92951.16660.92131.08680.58560.06997.74910.01580.7989
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 -2.50-2.97-3.48-2.78-2.74-3.34-3.283.59-4.08-2.81

Winmark Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.6180.81740.01580.92351.05060.90610.79890.80660.85260.929
GMI 0.99591.0011.00461.00541.01351.01321.00541.00280.98850.9923
AQI 1.01761.19311.13430.91590.84970.69120.73680.95110.90791.1209
SGI 1.02551.07161.01181.02291.12361.05811.07291.07281.03741.0668
DEPI 0.8630.87870.94140.95940.95890.93231.09711.13681.23241.3181
SGAI 0.88070.89780.88850.88670.9550.96430.98150.99481.01161.0133
LVGI 2.18582.19012.89180.68330.49960.44220.42051.60512.50573.0006
TATA -0.043-0.0643-0.0336-0.0745-0.0368-0.0533-0.0644-0.068-0.0177-0.0199
M-score -3.39-3.19-4.08-2.79-2.38-2.70-2.80-3.11-3.18-3.15
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