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Abercrombie & Fitch Co (NYSE:ANF)
Beneish M-Score
-3.40 (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 -3.40 suggests that the company is not a manipulator.

ANF' s 10-Year Beneish M-Score Range
Min: -3.87   Max: 20.72
Current: -3.4

-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 -2.70.


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 * 0.8198+0.528 * 1.0452+0.404 * 1.061+0.892 * 0.9154+0.115 * 0.9532
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9875+4.679 * -0.1404-0.327 * 1.2052
=-3.40

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $65 Mil.
Revenue was 911.453 + 890.605 + 822.428 + 1299.137 = $3,924 Mil.
Gross Profit was 567.07 + 552.956 + 511.659 + 767.106 = $2,399 Mil.
Total Current Assets was $1,137 Mil.
Total Assets was $2,576 Mil.
Property, Plant and Equipment(Net PPE) was $1,051 Mil.
Depreciation, Depletion and Amortization(DDA) was $230 Mil.
Selling, General & Admin. Expense(SGA) was $2,221 Mil.
Total Current Liabilities was $511 Mil.
Long-Term Debt was $347 Mil.
Net Income was 18.227 + 12.877 + -23.671 + 66.105 = $74 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 53.794 + 15.81 + -40.14 + 405.654 = $435 Mil.
Accounts Receivable was $87 Mil.
Revenue was 1033.293 + 945.698 + 838.769 + 1468.531 = $4,286 Mil.
Gross Profit was 651.04 + 604.122 + 553.166 + 930.653 = $2,739 Mil.
Total Current Assets was $1,287 Mil.
Total Assets was $2,852 Mil.
Property, Plant and Equipment(Net PPE) was $1,161 Mil.
Depreciation, Depletion and Amortization(DDA) was $239 Mil.
Selling, General & Admin. Expense(SGA) was $2,457 Mil.
Total Current Liabilities was $604 Mil.
Long-Term Debt was $185 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)
=(65.083 / 3923.623) / (86.726 / 4286.291)
=0.01658748 / 0.02023334
=0.8198

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)
=(552.956 / 4286.291) / (567.07 / 3923.623)
=0.63900958 / 0.61137143
=1.0452

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 - (1136.892 + 1050.795) / 2575.569) / (1 - (1286.61 + 1160.904) / 2852.396)
=0.15060051 / 0.14194453
=1.061

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
=3923.623 / 4286.291
=0.9154

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))
=(239.338 / (239.338 + 1160.904)) / (229.597 / (229.597 + 1050.795))
=0.17092617 / 0.17931774
=0.9532

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)
=(2221.233 / 3923.623) / (2457.336 / 4286.291)
=0.56611785 / 0.57330125
=0.9875

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)
=((347.303 + 511.293) / 2575.569) / ((185.373 + 603.58) / 2852.396)
=0.33336168 / 0.27659308
=1.2052

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
=(73.538 - 0 - 435.118) / 2575.569
=-0.1404

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 -3.40 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 0.95580.99810.99870.9941.0011.04031.00851.05280.97010.9982
AQI 52.39410.77581.7471.49873.12080.91441.02180.95931.04641.1261
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 1.37620.88740.8270.93130.91260.95571.15371.17641.0091.0398
TATA -0.1528-0.0699-0.0756-0.1378-0.0767-0.1424-0.0819-0.0779-0.1497-0.0424
M-score 20.72-2.70-2.42-2.71-2.01-2.38-2.96-2.78-3.06-2.98

Abercrombie & Fitch Co Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 0.87120.92841.02781.19130.9430.96750.74750.82780.89070.8198
GMI 1.06691.0390.96450.94790.93990.9481.00391.02681.03881.0452
AQI 0.85530.90981.04640.96451.04161.07991.12611.21021.1511.061
SGI 1.1291.09861.08481.04381.0340.98060.91270.9260.91470.9154
DEPI 1.08721.09131.11311.00510.94890.85550.85010.88450.90090.9532
SGAI 1.01251.02290.97290.98150.98481.0121.06671.04161.02290.9875
LVGI 1.26051.16721.0091.25721.03271.03391.03981.00731.05681.2052
TATA -0.088-0.1441-0.1463-0.1202-0.0939-0.0312-0.0424-0.0938-0.1249-0.1404
M-score -3.00-3.20-3.05-2.95-2.97-2.70-2.98-3.07-3.19-3.40
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