CarMax (FRA:XA4) Beneish M-Score : -2.77 (As of May. 01, 2024)

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What is CarMax 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 -2.77 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

FRA:XA4' s Beneish M-Score Range Over the Past 10 Years
Min: -3.01 Med: -2.23 Max: -0.74
Current: -2.77

During the past 13 years, the highest Beneish M-Score of CarMax was -0.74. The lowest was -3.01. And the median was -2.23.

CarMax Beneish M-Score Historical Data

The historical data trend for CarMax'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.

CarMax Beneish M-Score Chart

CarMax Annual Data

Trend

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

Feb24

Beneish M-Score

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-1.90

-2.19

-0.74

-3.01

-2.77

CarMax Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
Beneish M-Score	Get a 7-Day Free Trial															-3.01	-2.98	-2.87	-2.53	-2.77

Competitive Comparison of CarMax's Beneish M-Score

For the Auto & Truck Dealerships subindustry, CarMax'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.

CarMax's Beneish M-Score Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, CarMax's Beneish M-Score distribution charts can be found below:

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

CarMax 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 CarMax 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 * 0.8584

0.528 * 0.9214

0.404 * 0.9974

0.892 * 0.8559

0.115 * 1.1033

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0327

4.679 * 0.000283

0.327 * 0.988

-2.77

This Year (Feb24) TTM:

Last Year (Feb23) TTM:

Total Receivables was €205 Mil.
Revenue was 5215.861 + 5681.249 + 6486.708 + 7072.098 = €24,456 Mil.
Gross Profit was 543.399 + 566.285 + 638.934 + 751.999 = €2,501 Mil.
Total Current Assets was €4,845 Mil.
Total Assets was €25,211 Mil.
Property, Plant and Equipment(Net PPE) was €3,881 Mil.
Depreciation, Depletion and Amortization(DDA) was €240 Mil.
Selling, General, & Admin. Expense(SGA) was €2,169 Mil.
Total Current Liabilities was €2,143 Mil.
Long-Term Debt & Capital Lease Obligation was €17,109 Mil.
Net Income was 46.598 + 75.771 + 108.788 + 210.034 = €441 Mil.
Non Operating Income was 5.137 + 0.819 + 2.412 + 1.117 = €9 Mil.
Cash Flow from Operations was 287.034 + 194.131 + 113.859 + -170.462 = €425 Mil.

Total Receivables was €279 Mil.
Revenue was 5344.808 + 6382.343 + 8038.921 + 8808.793 = €28,575 Mil.
Gross Profit was 570.654 + 565.731 + 727.562 + 828.12 = €2,692 Mil.
Total Current Assets was €4,709 Mil.
Total Assets was €24,455 Mil.
Property, Plant and Equipment(Net PPE) was €3,714 Mil.
Depreciation, Depletion and Amortization(DDA) was €255 Mil.
Selling, General, & Admin. Expense(SGA) was €2,455 Mil.
Total Current Liabilities was €1,810 Mil.
Long-Term Debt & Capital Lease Obligation was €17,091 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)
	=	(205.009 / 24455.916)	/	(279.063 / 28574.865)
	=	0.008383	/	0.009766
	=	0.8584

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)
	=	(2692.067 / 28574.865)	/	(2500.617 / 24455.916)
	=	0.094211	/	0.10225
	=	0.9214

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 - (4845.053 + 3880.651) / 25211.431)	/	(1 - (4708.637 + 3714.136) / 24454.675)
	=	0.653899	/	0.655576
	=	0.9974

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
	=	24455.916	/	28574.865
	=	0.8559

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))
	=	(255.181 / (255.181 + 3714.136))	/	(240.123 / (240.123 + 3880.651))
	=	0.064288	/	0.058271
	=	1.1033

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)
	=	(2169.35 / 24455.916)	/	(2454.557 / 28574.865)
	=	0.088705	/	0.085899
	=	1.0327

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)
	=	((17108.588 + 2143.492) / 25211.431)	/	((17091.233 + 1810.382) / 24454.675)
	=	0.763625	/	0.772924
	=	0.988

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
	=	(441.191 - 9.485	-	424.562)	/	25211.431
	=	0.000283

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.

CarMax has a M-score of -2.77 suggests that the company is unlikely to be a manipulator.

CarMax Beneish M-Score Related Terms

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CarMax (FRA:XA4) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » CarMax Inc (FRA:XA4) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

KMX:USA KMX:Mexico

Address

12800 Tuckahoe Creek Parkway, Richmond, VA, USA, 23238

Website

https://www.carmax.com

CarMax sells, finances, and services used and new cars through a chain of about 240 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue (78% in fiscal 2023 due to the chip shortage) and wholesale about 13% (20% in fiscal 2023), with the remaining portion composed of extended service plans and repair. In fiscal 2023, the company retailed and wholesaled 807,823, and 585,071 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the U.S. but still estimates that it has only about 4% U.S. market share of vehicles 0-10 years old in 2022. It seeks over 5% share by the end of calendar 2025. CarMax is based in Richmond, Virginia.

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