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GuruFocus has detected 3 Warning Signs with Copart Inc $CPRT.
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Copart Inc (NAS:CPRT)
Beneish M-Score
-2.55 (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.

Copart Inc has a M-score of -2.55 suggests that the company is not a manipulator.

CPRT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.92   Max: -0.22
Current: -2.55

-3.92
-0.22

During the past 13 years, the highest Beneish M-Score of Copart Inc was -0.22. The lowest was -3.92. And the median was -2.58.


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 Copart Inc 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 * 0.9968+0.528 * 0.9913+0.404 * 0.7748+0.892 * 1.151+0.115 * 0.9303
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9041+4.679 * -0.0387-0.327 * 0.792
=-2.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $302 Mil.
Revenue was 373.862 + 349.532 + 345.991 + 332.659 = $1,402 Mil.
Gross Profit was 172.505 + 146.765 + 145.293 + 141.464 = $606 Mil.
Total Current Assets was $594 Mil.
Total Assets was $1,812 Mil.
Property, Plant and Equipment(Net PPE) was $913 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $149 Mil.
Total Current Liabilities was $221 Mil.
Long-Term Debt was $551 Mil.
Net Income was 90.546 + 66.066 + 167.28 + 84.122 = $408 Mil.
Non Operating Income was -0.194 + -3.021 + 3.332 + 6.051 = $6 Mil.
Cash Flow from Operations was 192.299 + 81.235 + 74.293 + 124.152 = $472 Mil.
Accounts Receivable was $263 Mil.
Revenue was 347.246 + 299.706 + 288.838 + 282.293 = $1,218 Mil.
Gross Profit was 157.647 + 124.614 + 120.861 + 118.784 = $522 Mil.
Total Current Assets was $465 Mil.
Total Assets was $1,624 Mil.
Property, Plant and Equipment(Net PPE) was $807 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $144 Mil.
Total Current Liabilities was $204 Mil.
Long-Term Debt was $671 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)
=(302.071 / 1402.044) / (263.292 / 1218.083)
=0.21545044 / 0.21615276
=0.9968

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)
=(521.906 / 1218.083) / (606.027 / 1402.044)
=0.42846506 / 0.43224535
=0.9913

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 - (593.609 + 913.303) / 1811.686) / (1 - (464.505 + 806.973) / 1624.135)
=0.16822672 / 0.21713528
=0.7748

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
=1402.044 / 1218.083
=1.151

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))
=(47.214 / (47.214 + 806.973)) / (57.694 / (57.694 + 913.303))
=0.05527361 / 0.05941728
=0.9303

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)
=(149.344 / 1402.044) / (143.508 / 1218.083)
=0.10651877 / 0.11781463
=0.9041

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)
=((550.755 + 221.488) / 1811.686) / ((670.507 + 203.581) / 1624.135)
=0.42625654 / 0.53818679
=0.792

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
=(408.014 - 6.168 - 471.979) / 1811.686
=-0.0387

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.

Copart Inc has a M-score of -2.55 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 local exchange's currency.

Copart Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 1.03640.72611.0330.95980.99820.3863.21190.33761.0921.0588
GMI 0.91671.14690.98730.93331.05220.96551.10180.99880.95490.9824
AQI 1.43571.07450.81870.88821.25950.9531.23411.01610.75761.0004
SGI 1.06071.39980.94681.04011.12861.05961.13221.11190.9851.1068
DEPI 1.03971.04711.07081.03070.99130.93290.98131.07291.10351.1389
SGAI 1.01710.98441.04711.20460.87831.00091.0641.07280.87520.8798
LVGI 1.2261.17450.730.89635.17061.06050.83310.7741.44061.1433
TATA -0.0457-0.0432-0.0598-0.0392-0.0726-0.0435-0.0171-0.0579-0.0279-0.0447
M-score -2.55-2.52-2.77-2.74-3.92-3.26-0.22-3.18-2.77-2.56

Copart Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 1.0091.11541.0921.15891.191.14671.05881.09831.0280.9968
GMI 0.94630.95380.95490.97720.99270.97620.98240.98090.97940.9913
AQI 0.69470.6630.75760.78021.1451.1931.00040.86010.73930.7748
SGI 1.05071.01010.9850.97491.00361.05811.10681.15821.17761.151
DEPI 1.06841.0681.10351.15481.17651.25441.13891.0440.98350.9303
SGAI 0.93530.86160.87520.8670.89550.95340.87980.91030.92190.9041
LVGI 1.19271.22581.44061.44371.21481.29971.14331.20710.94410.792
TATA -0.0438-0.0249-0.0279-0.0232-0.0235-0.0197-0.04470.0233-0.0103-0.0387
M-score -2.83-2.68-2.77-2.67-2.39-2.38-2.56-2.25-2.43-2.55
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