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GuruFocus has detected 1 Warning Sign with Jewett-Cameron Trading Co Ltd $JCTCF.
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Jewett-Cameron Trading Co Ltd (NAS:JCTCF)
Beneish M-Score
-1.80 (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.

Jewett-Cameron Trading Co Ltd has a M-score of -1.80 signals that the company is a manipulator.

JCTCF' s Beneish M-Score Range Over the Past 10 Years
Min: -4.11   Max: 0.95
Current: -1.8

-4.11
0.95

During the past 13 years, the highest Beneish M-Score of Jewett-Cameron Trading Co Ltd was 0.95. The lowest was -4.11. And the median was -2.51.


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 Jewett-Cameron Trading Co Ltd 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 * 1.2818+0.528 * 0.8628+0.404 * 0.6174+0.892 * 0.9374+0.115 * 1.4846
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1091+4.679 * 0.1285-0.327 * 0.7942
=-1.80

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

This Year (Feb17) TTM:Last Year (Feb16) TTM:
Accounts Receivable was $4.55 Mil.
Revenue was 9.499 + 10.422 + 10.523 + 14.459 = $44.90 Mil.
Gross Profit was 2.129 + 2.394 + 2.144 + 3.177 = $9.84 Mil.
Total Current Assets was $16.41 Mil.
Total Assets was $19.70 Mil.
Property, Plant and Equipment(Net PPE) was $3.18 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.27 Mil.
Selling, General & Admin. Expense(SGA) was $5.84 Mil.
Total Current Liabilities was $1.35 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.309 + 0.486 + 0.552 + 0.909 = $2.26 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -2.775 + 0.605 + 0.46 + 1.435 = $-0.28 Mil.
Accounts Receivable was $3.79 Mil.
Revenue was 11.188 + 11.942 + 11.483 + 13.289 = $47.90 Mil.
Gross Profit was 2.036 + 2.38 + 2.403 + 2.242 = $9.06 Mil.
Total Current Assets was $17.59 Mil.
Total Assets was $19.95 Mil.
Property, Plant and Equipment(Net PPE) was $2.17 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.29 Mil.
Selling, General & Admin. Expense(SGA) was $5.62 Mil.
Total Current Liabilities was $1.72 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)
=(4.548 / 44.903) / (3.785 / 47.902)
=0.10128499 / 0.07901549
=1.2818

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)
=(9.061 / 47.902) / (9.844 / 44.903)
=0.18915703 / 0.21922811
=0.8628

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 - (16.41 + 3.175) / 19.699) / (1 - (17.591 + 2.172) / 19.95)
=0.0057871 / 0.00937343
=0.6174

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
=44.903 / 47.902
=0.9374

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))
=(0.286 / (0.286 + 2.172)) / (0.27 / (0.27 + 3.175))
=0.11635476 / 0.07837446
=1.4846

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)
=(5.844 / 44.903) / (5.621 / 47.902)
=0.13014721 / 0.11734374
=1.1091

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 + 1.352) / 19.699) / ((0 + 1.724) / 19.95)
=0.06863293 / 0.08641604
=0.7942

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
=(2.256 - 0 - -0.275) / 19.699
=0.1285

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.

Jewett-Cameron Trading Co Ltd has a M-score of -1.80 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 local exchange's currency.

Jewett-Cameron Trading Co Ltd Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 1.01950.91961.01781.08930.99440.72651.00820.85021.51330.7955
GMI 0.89390.94060.83820.96791.12941.02770.94261.00790.99310.9847
AQI 5.74230.93361.07520.80130.8970.82020.58490.9670.75210.6655
SGI 0.92670.91210.6550.98681.01161.09251.07270.85910.99761.1391
DEPI 0.85440.92930.99651.20130.9751.13971.05850.89681.01871.3131
SGAI 1.01940.99221.34970.94910.89590.87970.94531.19161.04140.9845
LVGI 0.89980.75440.38310.83682.01690.96670.87650.57181.4691.0901
TATA 0.0883-0.1473-0.1007-0.03190.0112-0.11350.07190.0748-0.0537-0.046
M-score -0.24-3.31-3.16-2.57-2.71-3.19-2.21-2.31-2.52-2.89

Jewett-Cameron Trading Co Ltd Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
DSRI 1.3791.22311.09471.51331.45430.66030.72550.79550.77721.2818
GMI 1.01721.01971.04180.99311.02711.07360.9610.98470.92330.8628
AQI 0.93980.90880.84850.75210.67780.7060.61380.66550.6580.6174
SGI 0.88170.9670.9140.99761.09171.13871.22621.13911.00860.9374
DEPI 0.91960.93210.97731.01870.99521.01910.95661.31311.4761.4846
SGAI 1.15151.09351.16031.04140.97190.96070.91190.98451.10231.1091
LVGI 1.35741.07960.83921.4691.40160.87171.4181.09010.95280.7942
TATA 0.12610.1820.0473-0.0537-0.0914-0.3023-0.1494-0.046-0.08010.1285
M-score -1.81-1.53-2.27-2.52-2.65-4.11-3.53-2.89-3.18-1.80
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