Arcos Dorados Holdings (BUE:ARCO) Beneish M-Score : -2.16 (As of May. 24, 2024)

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What is Arcos Dorados Holdings Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.16 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Arcos Dorados Holdings's Beneish M-Score or its related term are showing as below:

BUE:ARCO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.62 Med: -2.82 Max: -0.91
Current: -2.16

During the past 13 years, the highest Beneish M-Score of Arcos Dorados Holdings was -0.91. The lowest was -3.62. And the median was -2.82.

Arcos Dorados Holdings Beneish M-Score Historical Data

The historical data trend for Arcos Dorados Holdings's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Arcos Dorados Holdings Beneish M-Score Chart

Arcos Dorados Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.66

-2.13

-3.11

-2.56

-2.27

Arcos Dorados Holdings Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.58	-2.61	-2.02	-2.27	-2.16

Competitive Comparison of Arcos Dorados Holdings's Beneish M-Score

For the Restaurants subindustry, Arcos Dorados Holdings's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Arcos Dorados Holdings's Beneish M-Score Distribution in the Restaurants Industry

For the Restaurants industry and Consumer Cyclical sector, Arcos Dorados Holdings's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Arcos Dorados Holdings's Beneish M-Score falls into.

Arcos Dorados Holdings Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Arcos Dorados Holdings for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.7025

0.528 * 1.048

0.404 * 1.0789

0.892 * 3.2903

0.115 * 1.5798

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9847

4.679 * 0.007235

0.327 * 0.9673

0.38

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ARS160,104 Mil.
Revenue was 911042.445 + 424339.255 + 393732.255 + 249725.038 = ARS1,978,839 Mil.
Gross Profit was 111515.829 + 59993.868 + 56427.689 + 32825.76 = ARS260,763 Mil.
Total Current Assets was ARS462,189 Mil.
Total Assets was ARS2,505,112 Mil.
Property, Plant and Equipment(Net PPE) was ARS1,750,769 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS60,394 Mil.
Selling, General, & Admin. Expense(SGA) was ARS127,889 Mil.
Total Current Liabilities was ARS696,788 Mil.
Long-Term Debt & Capital Lease Obligation was ARS1,315,909 Mil.
Net Income was 24018.833 + 20135.858 + 20899.365 + 6808.32 = ARS71,862 Mil.
Non Operating Income was -2830.8 + -4533.438 + 727.896 + 1100.88 = ARS-5,535 Mil.
Cash Flow from Operations was -7909.39 + 54037.368 + 0 + 13144.56 = ARS59,273 Mil.

Total Receivables was ARS28,580 Mil.
Revenue was 195730.964 + 170772.141 + 128070.63 + 106840.407 = ARS601,414 Mil.
Gross Profit was 26261.903 + 25489.505 + 17856.186 + 13448.442 = ARS83,056 Mil.
Total Current Assets was ARS127,246 Mil.
Total Assets was ARS533,702 Mil.
Property, Plant and Equipment(Net PPE) was ARS348,764 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS19,395 Mil.
Selling, General, & Admin. Expense(SGA) was ARS39,474 Mil.
Total Current Liabilities was ARS149,698 Mil.
Long-Term Debt & Capital Lease Obligation was ARS293,578 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(160103.648 / 1978838.993)	/	(28580.152 / 601414.142)
	=	0.080908	/	0.047522
	=	1.7025

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)
	=	(83056.036 / 601414.142)	/	(260763.146 / 1978838.993)
	=	0.138101	/	0.131776
	=	1.048

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (462188.768 + 1750768.95) / 2505112.29)	/	(1 - (127246.304 + 348763.668) / 533701.883)
	=	0.116623	/	0.108098
	=	1.0789

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	1978838.993	/	601414.142
	=	3.2903

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(19394.702 / (19394.702 + 348763.668))	/	(60393.95 / (60393.95 + 1750768.95))
	=	0.05268	/	0.033345
	=	1.5798

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(127888.752 / 1978838.993)	/	(39473.875 / 601414.142)
	=	0.064628	/	0.065635
	=	0.9847

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((1315909.197 + 696787.952) / 2505112.29)	/	((293578.074 + 149698.455) / 533701.883)
	=	0.803436	/	0.83057
	=	0.9673

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
	=	(71862.376 - -5535.462	-	59272.538)	/	2505112.29
	=	0.007235

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Arcos Dorados Holdings has a M-score of 0.38 signals that the company is likely to be a manipulator.

Arcos Dorados Holdings Beneish M-Score Related Terms

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Arcos Dorados Holdings (BUE:ARCO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Arcos Dorados Holdings Inc (BUE:ARCO) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

ARCO:USA ARCO:Mexico AD8:Germany

Address

Dr. Luis Bonavita 1294, Office 501, WTC Free Zone, Montevideo, URY, 11300

Website

https://www.arcosdorados.com

Arcos Dorados Holdings Inc operates McDonald's-branded restaurants in approximately 20 countries and territories in Latin America and the Caribbean. It functions through two sources which include company-operated restaurants and franchised restaurants segment. Their menu includes hamburgers, McNuggets, salad, sandwiches, french fries and others.