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Abercrombie & Fitch Co (NYSE:ANF)
Beneish M-Score
-3.19 (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.

Abercrombie & Fitch Co has a M-score of -3.19 suggests that the company is not a manipulator.

ANF' s 10-Year Beneish M-Score Range
Min: -3.87   Max: 20.72
Current: -3.19

-3.87
20.72

During the past 13 years, the highest Beneish M-Score of Abercrombie & Fitch Co was 20.72. The lowest was -3.87. And the median was -2.67.


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 Abercrombie & Fitch Co 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 * 0.8907+0.528 * 1.0465+0.404 * 1.151+0.892 * 0.9147+0.115 * 0.9009
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0229+4.679 * -0.1249-0.327 * 1.0568
=-3.19

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $76 Mil.
Revenue was 890.605 + 822.428 + 1299.137 + 1033.293 = $4,045 Mil.
Gross Profit was 552.956 + 511.659 + 767.106 + 651.04 = $2,483 Mil.
Total Current Assets was $1,077 Mil.
Total Assets was $2,563 Mil.
Property, Plant and Equipment(Net PPE) was $1,098 Mil.
Depreciation, Depletion and Amortization(DDA) was $234 Mil.
Selling, General & Admin. Expense(SGA) was $2,311 Mil.
Total Current Liabilities was $559 Mil.
Long-Term Debt was $172 Mil.
Net Income was 12.877 + -23.671 + 66.105 + -15.644 = $40 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 15.81 + -40.14 + 405.654 + -21.441 = $360 Mil.
Accounts Receivable was $93 Mil.
Revenue was 945.698 + 838.769 + 1468.531 + 1169.649 = $4,423 Mil.
Gross Profit was 604.122 + 553.166 + 930.653 + 752.514 = $2,840 Mil.
Total Current Assets was $1,216 Mil.
Total Assets was $2,843 Mil.
Property, Plant and Equipment(Net PPE) was $1,253 Mil.
Depreciation, Depletion and Amortization(DDA) was $235 Mil.
Selling, General & Admin. Expense(SGA) was $2,470 Mil.
Total Current Liabilities was $579 Mil.
Long-Term Debt was $189 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)
=(75.679 / 4045.463) / (92.886 / 4422.647)
=0.01870713 / 0.02100235
=0.8907

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)
=(511.659 / 4422.647) / (552.956 / 4045.463)
=0.64225225 / 0.61371492
=1.0465

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 - (1076.893 + 1098.24) / 2563.176) / (1 - (1216.07 + 1252.841) / 2842.843)
=0.15139148 / 0.13153452
=1.151

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
=4045.463 / 4422.647
=0.9147

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))
=(235.211 / (235.211 + 1252.841)) / (233.689 / (233.689 + 1098.24))
=0.15806638 / 0.17545154
=0.9009

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)
=(2310.683 / 4045.463) / (2469.677 / 4422.647)
=0.57117887 / 0.55841603
=1.0229

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)
=((172.437 + 559.224) / 2563.176) / ((188.626 + 579.227) / 2842.843)
=0.28545094 / 0.27010039
=1.0568

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
=(39.667 - 0 - 359.883) / 2563.176
=-0.1249

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.

Abercrombie & Fitch Co has a M-score of -3.19 suggests that the company will not 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 own currency.

Abercrombie & Fitch Co Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 4.4330.80460.8671.1011.06252.03540.75510.91721.02780.7475
GMI 0.95580.99810.99870.9941.0011.04031.00611.04230.98220.9982
AQI 52.39410.77581.7471.49873.12080.91441.02180.93811.071.1261
SGI 1.18351.37771.19161.13010.92910.84061.18441.19871.08480.9127
DEPI 0.97020.94871.09180.92860.71990.86170.96881.02041.11310.8501
SGAI 1.120.95570.99681.01061.11191.14940.94440.97470.97291.0667
LVGI 1.37620.88740.8270.93130.91260.95571.15371.14151.03991.0398
TATA -0.1528-0.0699-0.0756-0.1378-0.0767-0.1401-0.0801-0.071-0.1497-0.0424
M-score 20.72-2.70-2.42-2.71-2.01-2.37-2.95-2.75-3.06-2.98

Abercrombie & Fitch Co Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.75250.87120.92841.02781.19130.9430.96750.74750.82780.8907
GMI 1.07241.07171.03520.98220.94010.93080.95340.99821.03371.0465
AQI 0.96580.85530.90981.070.96451.04161.07991.12611.21021.151
SGI 1.17281.1291.09861.08481.04381.0340.98060.91270.9260.9147
DEPI 1.07291.08721.09131.11311.00510.94890.85550.85010.88450.9009
SGAI 0.99661.01251.02290.97290.98150.98481.04841.06671.04161.0229
LVGI 1.02711.26051.16721.03991.25721.03271.03391.03981.00731.0568
TATA -0.0854-0.0908-0.1425-0.1486-0.1143-0.0895-0.0312-0.0424-0.0938-0.1249
M-score -2.93-3.01-3.19-3.05-2.93-2.95-2.70-2.98-3.06-3.19
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