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Abercrombie & Fitch Co (NYSE:ANF)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

ANF' s 10-Year Beneish M-Score Range
Min: -3.9   Max: 4.12
Current: -3.06

-3.9
4.12

During the past 13 years, the highest Beneish M-Score of Abercrombie & Fitch Co was 4.12. The lowest was -3.90. And the median was -2.57.


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 * 0.8278+0.528 * 1.0208+0.404 * 1.2102+0.892 * 0.926+0.115 * 0.8845
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0385+4.679 * -0.0925-0.327 * 1.0073
=-3.06

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $70 Mil.
Revenue was 822.428 + 1299.137 + 1033.293 + 945.698 = $4,101 Mil.
Gross Profit was 511.659 + 767.106 + 651.04 + 604.122 = $2,534 Mil.
Total Current Assets was $1,053 Mil.
Total Assets was $2,566 Mil.
Property, Plant and Equipment(Net PPE) was $1,122 Mil.
Depreciation, Depletion and Amortization(DDA) was $235 Mil.
Selling, General & Admin. Expense(SGA) was $2,363 Mil.
Total Current Liabilities was $470 Mil.
Long-Term Debt was $178 Mil.
Net Income was -23.671 + 66.105 + -15.644 + 11.37 = $38 Mil.
Non Operating Income was 0 + 0 + 0 + -3.5 = $-4 Mil.
Cash Flow from Operations was -40.14 + 405.654 + -21.441 + -65.091 = $279 Mil.
Accounts Receivable was $91 Mil.
Revenue was 838.769 + 1468.531 + 1169.649 + 951.407 = $4,428 Mil.
Gross Profit was 553.166 + 914.376 + 731.567 + 594.407 = $2,794 Mil.
Total Current Assets was $1,262 Mil.
Total Assets was $2,895 Mil.
Property, Plant and Equipment(Net PPE) was $1,268 Mil.
Depreciation, Depletion and Amortization(DDA) was $229 Mil.
Selling, General & Admin. Expense(SGA) was $2,457 Mil.
Total Current Liabilities was $534 Mil.
Long-Term Debt was $192 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)
=(69.983 / 4100.556) / (91.303 / 4428.356)
=0.01706671 / 0.02061781
=0.8278

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)
=(767.106 / 4428.356) / (511.659 / 4100.556)
=0.63082462 / 0.61794718
=1.0208

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 - (1053.026 + 1121.777) / 2566.393) / (1 - (1261.708 + 1268.285) / 2895.011)
=0.1525838 / 0.12608519
=1.2102

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
=4100.556 / 4428.356
=0.926

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))
=(229.157 / (229.157 + 1268.285)) / (234.678 / (234.678 + 1121.777))
=0.1530323 / 0.17300832
=0.8845

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)
=(2362.717 / 4100.556) / (2457.094 / 4428.356)
=0.5761943 / 0.55485467
=1.0385

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)
=((177.941 + 470.102) / 2566.393) / ((192.25 + 533.506) / 2895.011)
=0.25251121 / 0.25069197
=1.0073

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
=(38.16 - -3.5 - 278.982) / 2566.393
=-0.0925

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 -3.06 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 3.06731.16280.8671.1011.04562.06820.75510.91721.02780.7475
GMI 0.93330.6770.99870.9941.00391.03721.00851.05280.97010.9982
AQI 13.56112.59851.7471.49873.01480.94651.02180.95931.04641.1261
SGI 1.18351.37771.19161.13010.94410.82721.18441.19871.08480.9127
DEPI 1.35250.94871.09180.92860.71990.86170.96881.02041.11310.8501
SGAI 1.23131.69690.99681.01061.14751.11370.94440.97470.97591.0635
LVGI 1.31520.89440.8270.93130.91260.95571.15371.17641.0091.0398
TATA -0.1595-0.0699-0.0756-0.1378-0.0799-0.1424-0.0819-0.0779-0.1497-0.0424
M-score 3.78-1.94-2.42-2.71-2.07-2.34-2.96-2.78-3.06-2.98

Abercrombie & Fitch Co Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.91720.75250.87120.92841.02781.19130.9430.96750.74750.8278
GMI 1.05281.06841.06691.0390.97010.95340.94540.95370.99821.0208
AQI 0.95930.96580.85530.90981.04640.96451.04161.07991.12611.2102
SGI 1.19871.17281.1291.09861.08481.04381.0340.98060.91270.926
DEPI 1.02041.07291.08721.09131.11311.00510.94890.85550.85010.8845
SGAI 0.97470.99661.01251.02290.97590.98440.98781.05151.06351.0385
LVGI 1.17641.02711.26051.16721.0091.25721.03271.03391.03981.0073
TATA -0.0779-0.0819-0.088-0.1441-0.1497-0.1237-0.0962-0.0335-0.0412-0.0925
M-score -2.78-2.91-3.00-3.20-3.06-2.96-2.98-2.71-2.97-3.06
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