Encore Beneish M Score

WIRE
 Stock
  

USD 138.77  8.03  5.47%   

This module uses fundamental data of Encore Wire to approximate the value of its Beneish M Score. Encore Wire 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 Your Current Watchlist.
  
As of December 5, 2022, Total Debt is expected to decline to about 102.7 M. In addition to that, Debt Current is expected to decline to about 89.9 M. Encore Wire Calculated Tax Rate is projected to decrease significantly based on the last few years of reporting. The past year's Calculated Tax Rate was at 22.59. The current year PPandE Turnover is expected to grow to 6.10, whereas Receivables Turnover is forecasted to decline to 5.91.
At this time, it appears that Encore Wire is a possible manipulator. The earnings manipulation may begin if Encore Wire's 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 Encore Wire 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 Encore Wire's 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.
-1.95
Beneish M Score - Possible Manipulator
Elasticity of Receivables0.89Focus
Asset QualityN/AFocus
Expense Coverage0.82Focus
Gross Margin Strengs1.08Focus
Accruals Factor0.82Focus
Depreciation Resistance1.19Focus
Net Sales Growth1.08Focus
Financial Leverage Condition0.93Focus

Encore Wire 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 Encore Wire's 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 Expense55 M62.4 M
Fairly Down
Increasing
Slightly volatile
Revenues2.8 B2.6 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables203.1 M212.6 M
Sufficiently Down
Increasing
Slightly volatile
Property Plant and Equipment Net273.2 M253.3 M
Significantly Up
Increasing
Slightly volatile
Operating Income754.4 M699.2 M
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations451.5 M418.4 M
Significantly Up
Increasing
Slightly volatile
Liabilities Non Current49.3 M39.1 M
Significantly Up
Increasing
Slightly volatile
Current Liabilities166.3 M154.1 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities206.6 M191.4 M
Significantly Up
Increasing
Slightly volatile
Gross Margin36.1133.4685
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion13.6 M15.1 M
Moderately Down
Increasing
Slightly volatile
Debt Non Current100.9 M115.8 M
Fairly Down
Increasing
Slightly volatile
Debt Current89.9 M90.4 M
Slightly Down
Decreasing
Slightly volatile
Total Debt102.7 M115.5 M
Fairly Down
Increasing
Slightly volatile
Assets Non Current273.4 M253.4 M
Significantly Up
Increasing
Slightly volatile
Current Assets1.1 BB
Significantly Up
Increasing
Slightly volatile
Total Assets1.7 B1.5 B
Significantly Up
Increasing
Slightly volatile

Encore Wire 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 Encore Wire's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Encore Wire in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Encore Wire's degree of accounting gimmicks and manipulations.

About Encore Wire 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

13.64 Million

Encore Wire Depreciation Amortization and Accretion is projected to increase significantly based on the last few years of reporting. The past year's Depreciation Amortization and Accretion was at 15.13 Million

Encore Wire 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 Encore Wire. 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.
201720182019202020212022 (projected)
Revenues1.16 B1.29 B1.27 B1.28 B2.59 B2.8 B
Total Assets733.98 M818.06 M883.15 M966.45 M1.53 B1.65 B
Current Assets446.98 M519.24 M549.24 M555.13 M1.04 B1.12 B
Total Liabilities92.63 M97.6 M104.06 M128.72 M191.45 M206.56 M
Current Liabilities71.63 M73.57 M75.3 M93.59 M154.1 M166.27 M
Operating Income79.45 M99.51 M71.53 M97.53 M699.2 M754.4 M
Gross Margin13.4114.7213.0215.2333.4736.11

About Encore Wire Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Encore Wire's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Encore Wire using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Encore Wire 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.
Encore Wire Corporation manufactures and sells electrical building wires and cables for interior electrical wiring in the United States. Encore Wire Corporation was incorporated in 1989 and is headquartered in McKinney, Texas. Encore Wire operates under Electrical Equipment Parts classification in the United States and is traded on NASDAQ Exchange. It employs 1440 people.

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Check out Your Current Watchlist. You can also try Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

Other Tools for Encore Stock

When running Encore Wire price analysis, check to measure Encore Wire's 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 Encore Wire is operating at the current time. Most of Encore Wire's value examination focuses on studying past and present price action to predict the probability of Encore Wire's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Encore Wire's price. Additionally, you may evaluate how the addition of Encore Wire to your portfolios can decrease your overall portfolio volatility.
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