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Winmark Corporation (NAS:WINA)
Beneish M-Score
-3.10 (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 Corporation has a M-score of -3.10 suggests that the company is not a manipulator.

WINA' s 10-Year Beneish M-Score Range
Min: -5.19   Max: 0.13
Current: -3.1

-5.19
0.13

During the past 13 years, the highest Beneish M-Score of Winmark Corporation was 0.13. The lowest was -5.19. And the median was -2.85.


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 Corporation 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 * 0.4847+0.528 * 0.9887+0.404 * 0.7368+0.892 * 1.0729+0.115 * 1.0971
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9935+4.679 * -0.0642-0.327 * 0.4205
=-3.10

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1.37 Mil.
Revenue was 13.767 + 14.792 + 14.024 + 13.148 = $55.73 Mil.
Gross Profit was 13.296 + 14.223 + 13.499 + 12.507 = $53.53 Mil.
Total Current Assets was $30.68 Mil.
Total Assets was $53.04 Mil.
Property, Plant and Equipment(Net PPE) was $1.38 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $23.18 Mil.
Total Current Liabilities was $10.51 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 4.586 + 5.252 + 4.337 + 4.058 = $18.23 Mil.
Non Operating Income was 0 + 0 + 0 + -0.01 = $-0.01 Mil.
Cash Flow from Operations was 4.611 + 7.361 + 2.954 + 6.723 = $21.65 Mil.
Accounts Receivable was $2.64 Mil.
Revenue was 13.118 + 14.799 + 12.192 + 11.833 = $51.94 Mil.
Gross Profit was 12.479 + 14.115 + 11.559 + 11.169 = $49.32 Mil.
Total Current Assets was $18.94 Mil.
Total Assets was $43.54 Mil.
Property, Plant and Equipment(Net PPE) was $1.23 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $21.75 Mil.
Total Current Liabilities was $20.51 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)
=(1.372 / 55.731) / (2.638 / 51.942)
=0.02461826 / 0.05078742
=0.4847

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)
=(14.223 / 51.942) / (13.296 / 55.731)
=0.94955912 / 0.960417
=0.9887

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 - (30.675 + 1.382) / 53.036) / (1 - (18.935 + 1.23) / 43.539)
=0.39556151 / 0.53685202
=0.7368

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
=55.731 / 51.942
=1.0729

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))
=(0.434 / (0.434 + 1.23)) / (0.431 / (0.431 + 1.382))
=0.26081731 / 0.23772752
=1.0971

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)
=(23.18 / 55.731) / (21.745 / 51.942)
=0.4159265 / 0.41864002
=0.9935

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 + 10.508) / 53.036) / ((0 + 20.513) / 43.539)
=0.19812957 / 0.47114082
=0.4205

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
=(18.233 - -0.01 - 21.649) / 53.036
=-0.0642

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 Corporation has a M-score of -3.10 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 Corporation 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 Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.36150.53850.77511.31261.1171.81940.92350.83940.8810.4847
GMI 0.97150.99160.99590.99591.0011.00460.99980.99630.99610.9887
AQI 1.20060.92911.06111.01761.19311.13430.91590.84970.69120.7368
SGI 1.21111.24591.2261.02551.07161.01181.02291.12361.05811.0729
DEPI 0.95410.84420.84690.8630.87870.94140.95940.95890.93231.0971
SGAI 0.94060.95890.97270.88070.89780.88850.8980.96690.97620.9935
LVGI 0.43750.4491.85222.18582.19012.89180.68330.49960.44220.4205
TATA -0.1427-0.1063-0.0382-0.043-0.0643-0.0336-0.0742-0.0365-0.0531-0.0642
M-score -3.29-3.05-2.93-2.75-2.92-2.42-2.79-2.59-2.73-3.10
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