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Winmark Corp (NAS:WINA)
Beneish M-Score
-2.19 (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 -2.18 signals that the company is a manipulator.

WINA' s Beneish M-Score Range Over the Past 10 Years
Min: -5.87   Max: 16.36
Current: -2.19

-5.87
16.36

During the past 13 years, the highest Beneish M-Score of Winmark Corp was 16.36. The lowest was -5.87. And the median was -2.91.


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 * 1.6763+0.528 * 0.9917+0.404 * 1.0321+0.892 * 1.1688+0.115 * 0.8276
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0142+4.679 * 0.0221-0.327 * 2.7178
=-2.18

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2.17 Mil.
Revenue was 16 + 15.477 + 21.024 + 16.183 = $68.68 Mil.
Gross Profit was 15.288 + 14.831 + 20.326 + 15.719 = $66.16 Mil.
Total Current Assets was $22.53 Mil.
Total Assets was $46.78 Mil.
Property, Plant and Equipment(Net PPE) was $1.22 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.43 Mil.
Selling, General & Admin. Expense(SGA) was $29.50 Mil.
Total Current Liabilities was $11.40 Mil.
Long-Term Debt was $68.60 Mil.
Net Income was 5.34 + 4.751 + 6.054 + 5.611 = $21.76 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 5.364 + 1.053 + 11.748 + 2.557 = $20.72 Mil.
Accounts Receivable was $1.11 Mil.
Revenue was 16.404 + 14.039 + 14.553 + 13.767 = $58.76 Mil.
Gross Profit was 15.662 + 13.38 + 13.798 + 13.296 = $56.14 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 $24.88 Mil.
Total Current Liabilities was $31.33 Mil.
Long-Term Debt was $0.09 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)
=(2.169 / 68.684) / (1.107 / 58.763)
=0.03157941 / 0.01883838
=1.6763

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)
=(14.831 / 58.763) / (15.288 / 68.684)
=0.955295 / 0.96331023
=0.9917

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 - (22.534 + 1.219) / 46.775) / (1 - (24.624 + 1.501) / 49.941)
=0.492186 / 0.47688272
=1.0321

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
=68.684 / 58.763
=1.1688

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))
=(0.414 / (0.414 + 1.501)) / (0.431 / (0.431 + 1.219))
=0.21618799 / 0.26121212
=0.8276

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)
=(29.496 / 68.684) / (24.881 / 58.763)
=0.42944499 / 0.42341269
=1.0142

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)
=((68.603 + 11.398) / 46.775) / ((0.094 + 31.334) / 49.941)
=1.71033672 / 0.62930258
=2.7178

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
=(21.756 - 0 - 20.722) / 46.775
=0.0221

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 -2.18 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92951.16660.92131.08680.58560.06997.74910.01580.79890.9109
GMI 0.92630.94920.98980.98260.97890.92750.99161.00460.98871.0034
AQI 1.21411.02381.04950.79550.69481.29480.92911.13430.73681.1487
SGI 0.97791.0291.13861.13671.05281.10481.24591.01181.07291.0978
DEPI 1.0331.08660.82520.73221.93671.07890.84410.94151.09331.0589
SGAI 1.27111.02490.99730.87490.92010.95730.9580.90271.00470.974
LVGI 1.23043.84551.35110.93890.61920.81290.4492.89180.42052.6742
TATA -0.0707-0.0498-0.05-0.0806-0.136-0.043-0.1067-0.0325-0.06440.0381
M-score -2.97-3.48-2.78-2.74-3.34-3.283.59-4.08-2.81-2.77

Winmark Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.05060.90610.79890.80970.85260.9290.91090.95461.99961.6763
GMI 1.01351.01321.00540.99710.98080.98480.98670.98610.99370.9917
AQI 0.84970.69120.73680.95110.90791.12091.14870.99041.01121.0321
SGI 1.12361.05811.07291.07281.03741.06681.09781.1841.20891.1688
DEPI 0.95890.93231.09711.13681.23241.31811.05911.00520.87980.8276
SGAI 0.9550.96430.98151.00781.02981.0311.01191.0531.03211.0142
LVGI 0.49960.44220.42051.60512.50573.00062.67420.63882.84962.7178
TATA -0.0368-0.0533-0.0644-0.068-0.0177-0.01990.0381-0.0237-0.02540.0221
M-score -2.38-2.70-2.80-3.11-3.18-3.16-2.79-2.37-2.12-2.18
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