Encore Wire Stock Beneish M Score

WIRE Stock  USD 188.39  4.09  2.22%   
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 Encore Wire Piotroski F Score and Encore Wire Altman Z Score analysis.
For information on how to trade Encore Stock refer to our How to Trade Encore Stock guide.
The current year's Debt to Equity Ratio is expected to grow to 0.12, whereas Long Term Debt to Equity is forecasted to decline to 0.29. At present, Encore Wire's Calculated Tax Rate is projected to drop based on the last few years of reporting. . The current year's PPandE Turnover is expected to grow to 5.95, whereas Receivables Turnover is forecasted to decline to 5.58.
At this time, it appears that Encore Wire is an unlikely 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.
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.04Focus
Asset QualityN/AFocus
Expense Coverage1.0Focus
Gross Margin Strengs0.79Focus
Accruals Factor1.0Focus
Depreciation Resistance0.91Focus
Net Sales Growth0.8Focus
Financial Leverage ConditionN/AFocus

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 Expense159.3 M197.4 M
Significantly Down
Slightly volatile
Revenues2.4 BB
Significantly Down
Slightly volatile
Trade and Non Trade Receivables417.5 M498.8 M
Fairly Down
Slightly volatile
Property Plant and Equipment Net512 M616.6 M
Significantly Down
Slightly volatile
Operating Income987.2 M915 M
Significantly Up
Slightly volatile
Net Cash Flow from Operations743.3 M688.9 M
Significantly Up
Slightly volatile
Liabilities Non Current46.8 M55.9 M
Fairly Down
Slightly volatile
Current Liabilities121.7 M144.2 M
Fairly Down
Slightly volatile
Total Liabilities168.5 M200.1 M
Fairly Down
Slightly volatile
Gross Margin0.290.369
Significantly Down
Slightly volatile
Depreciation Amortization and Accretion24.1 M26.2 M
Significantly Down
Slightly volatile
Assets Non Current512.8 M617.1 M
Significantly Down
Slightly volatile
Current Assets1.5 B1.4 B
Significantly Up
Slightly volatile
Total Assets2.2 BB
Significantly Up
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

24.14 Million

At present, Encore Wire's Depreciation Amortization and Accretion is projected to increase significantly based on the last few years of reporting.

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.
201820192020202120222023 (projected)
Trade and Non Trade Receivables235.4M223.1M275.8M491.1M498.8M417.5M
Total Assets818.1M883.2M966.5M1.5B2.0B2.2B
Current Assets519.2M549.2M555.1M1.0B1.4B1.5B
Assets Non Current298.8M333.9M411.3M495.5M617.1M512.8M
Property Plant and Equipment Net298.7M333.2M410.8M494.9M616.6M512.0M
Depreciation Amortization and Accretion16.5M17.7M19.5M23.3M26.2M24.1M
Selling General and Administrative Expense90.2M94.4M97.0M168.5M197.4M159.3M
Total Liabilities97.6M104.1M128.7M191.4M200.1M168.5M
Current Liabilities73.6M75.3M93.6M154.1M144.2M121.7M
Liabilities Non Current24.0M28.8M35.1M37.3M55.9M46.8M
Operating Income99.5M71.5M97.5M699.2M915.0M987.2M
Net Cash Flow from Operations81.6M106.1M57.5M418.4M688.9M743.3M

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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Our tools can tell you how much better you can do entering a position in Encore Wire 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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When determining whether Encore Wire is a strong investment it is important to analyze Encore Wire's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Encore Wire's future performance. For an informed investment choice regarding Encore Stock, refer to the following important reports:
Check out Encore Wire Piotroski F Score and Encore Wire Altman Z Score analysis.
For information on how to trade Encore Stock refer to our How to Trade Encore Stock guide.
You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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Is Encore Wire's 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 Encore Wire. If investors know Encore 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 Encore Wire 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 Encore Wire is measured differently than its book value, which is the value of Encore that is recorded on the company's balance sheet. Investors also form their own opinion of Encore Wire's value that differs from its market value or its book value, called intrinsic value, which is Encore Wire's 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 Encore Wire's market value can be influenced by many factors that don't directly affect Encore Wire's 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 Encore Wire's value and its price as these two are different measures arrived at by different means. Investors typically determine if Encore Wire is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Encore Wire's 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.