Arcos Beneish M Score

ARCO Stock  USD 9.74  0.49  4.79%   
This module uses fundamental data of Arcos Dorados to approximate the value of its Beneish M Score. Arcos Dorados M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Arcos Dorados Piotroski F Score and Arcos Dorados Altman Z Score analysis.
As of 22nd of September 2023, Total Debt is likely to drop to about 1.4 B. In addition to that, Debt Current is likely to drop to about 95.2 M. Arcos Dorados Enterprise Value over EBIT is very stable at the moment as compared to the past year. Arcos Dorados reported last year Enterprise Value over EBIT of 11.00. As of 22nd of September 2023, Enterprise Value over EBITDA is likely to grow to 8.04, while Current Ratio is likely to drop 0.84.
At this time, it appears that Arcos Dorados Holdings is an unlikely manipulator. The earnings manipulation may begin if Arcos Dorados' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Arcos Dorados executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Arcos Dorados' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.04Focus
Asset Quality1.75Focus
Expense Coverage1.07Focus
Gross Margin Strengs0.88Focus
Accruals Factor1.07Focus
Depreciation Resistance0.9Focus
Net Sales Growth0.9Focus
Financial Leverage Condition0.94Focus

Arcos Dorados Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Arcos Dorados' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense229.4 M239.3 M
Sufficiently Down
Slightly volatile
Revenues3.2 B3.6 B
Moderately Down
Slightly volatile
Trade and Non Trade Receivables140.7 M151.1 M
Significantly Down
Slightly volatile
Property Plant and Equipment Net1.6 B1.7 B
Sufficiently Down
Slightly volatile
Operating Income285.3 M264.4 M
Significantly Up
Pretty Stable
Net Cash Flow from Operations297.3 M345.4 M
Fairly Down
Pretty Stable
Liabilities Non Current1.4 B1.6 B
Moderately Down
Slightly volatile
Current Liabilities740.8 M759.4 M
Fairly Down
Slightly volatile
Total Liabilities2.1 B2.3 B
Significantly Down
Slightly volatile
Investments Non Current55.9 M48.8 M
Fairly Up
Slightly volatile
Investments Current119.5 M110.7 M
Significantly Up
Slightly volatile
Investments156.5 M145.1 M
Significantly Up
Slightly volatile
Gross Margin0.120.136
Fairly Down
Slightly volatile
Depreciation Amortization and Accretion127.4 M119.8 M
Notably Up
Slightly volatile
Debt Non Current1.3 B1.5 B
Moderately Down
Slightly volatile
Debt Current95.2 M112.5 M
Fairly Down
Slightly volatile
Total Debt1.4 B1.6 B
Moderately Down
Slightly volatile
Assets Non Current1.9 BB
Sufficiently Down
Slightly volatile
Current Assets578.5 M684.4 M
Fairly Down
Pretty Stable
Total Assets2.6 B2.6 B
Sufficiently Down
Slightly volatile

Arcos Dorados Holdings Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Arcos Dorados' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Arcos Dorados in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Arcos Dorados' degree of accounting gimmicks and manipulations.

About Arcos Dorados Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

127.41 Million

Arcos Dorados Depreciation Amortization and Accretion is very stable at the moment as compared to the past year. Arcos Dorados reported last year Depreciation Amortization and Accretion of 119.78 Million

Arcos Dorados Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Arcos Dorados. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201820192020202120222023 (projected)
Revenues3.08 B2.96 B1.98 B2.66 B3.62 B3.25 B
Total Assets1.58 B2.56 B2.29 B2.36 B2.64 B2.55 B
Current Assets464.56 M405.37 M415.53 M540.12 M684.36 M578.46 M
Assets Non Current1.11 B2.15 B1.88 B1.82 B1.95 B1.89 B
Total Liabilities1.19 B2.14 B2.1 B2.14 B2.31 B2.14 B
Current Liabilities493.31 M595.45 M503.47 M617.86 M759.41 M740.75 M
Total Debt644.5 M1.59 B1.61 B1.55 B1.59 B1.42 B
Debt Current14.88 M96.58 M64.68 M91.91 M112.48 M95.22 M
Debt Non Current629.62 M1.49 B1.54 B1.46 B1.48 B1.33 B
Operating Income123.46 M159.94 M(66.75 M)139.52 M264.42 M285.3 M
Investments54.73 M57.85 M124.24 M133.48 M145.08 M156.53 M

About Arcos Dorados Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Arcos Dorados Holdings's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Arcos Dorados using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Arcos Dorados Holdings based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Arcos Dorados Holdings Inc. operates as a franchisee of McDonalds restaurants. The company was founded in 2007 and is based in Montevideo, Uruguay. Arcos Dorados operates under Restaurants classification in the United States and is traded on New York Stock Exchange.

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Our tools can tell you how much better you can do entering a position in Arcos Dorados without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Arcos Dorados

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Arcos Dorados position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Arcos Dorados will appreciate offsetting losses from the drop in the long position's value.

Moving together with Arcos Stock

+0.61SGSweetgreen Fiscal Quarter End 30th of September 2023 PairCorr
+0.65CCLCarnival Earnings Call This WeekPairCorr

Moving against Arcos Stock

-0.53FUNCedar Fair LP Fiscal Quarter End 30th of September 2023 PairCorr
The ability to find closely correlated positions to Arcos Dorados could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Arcos Dorados when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Arcos Dorados - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Arcos Dorados Holdings to buy it.
The correlation of Arcos Dorados is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Arcos Dorados moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Arcos Dorados Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Arcos Dorados can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Check out Arcos Dorados Piotroski F Score and Arcos Dorados Altman Z Score analysis. Note that the Arcos Dorados Holdings information on this page should be used as a complementary analysis to other Arcos Dorados' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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When running Arcos Dorados' price analysis, check to measure Arcos Dorados' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Arcos Dorados is operating at the current time. Most of Arcos Dorados' value examination focuses on studying past and present price action to predict the probability of Arcos Dorados' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Arcos Dorados' price. Additionally, you may evaluate how the addition of Arcos Dorados to your portfolios can decrease your overall portfolio volatility.
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Is Arcos Dorados' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Arcos Dorados. If investors know Arcos will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Arcos Dorados listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
Dividend Share
Earnings Share
Revenue Per Share
Quarterly Revenue Growth
The market value of Arcos Dorados Holdings is measured differently than its book value, which is the value of Arcos that is recorded on the company's balance sheet. Investors also form their own opinion of Arcos Dorados' value that differs from its market value or its book value, called intrinsic value, which is Arcos Dorados' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Arcos Dorados' market value can be influenced by many factors that don't directly affect Arcos Dorados' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Arcos Dorados' value and its price as these two are different measures arrived at by different means. Investors typically determine if Arcos Dorados is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Arcos Dorados' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.