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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-2.54 (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.

Ascena Retail Group Inc has a M-score of -2.54 suggests that the company is not a manipulator.

ASNA' s 10-Year Beneish M-Score Range
Min: -3.43   Max: 4.9
Current: -2.54

-3.43
4.9

During the past 13 years, the highest Beneish M-Score of Ascena Retail Group Inc was 4.90. The lowest was -3.43. And the median was -2.69.


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 Ascena Retail Group Inc 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 * 1+0.528 * 0.9798+0.404 * 0.9916+0.892 * 1.172+0.115 * 1.0049
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0361+4.679 * -0.0665-0.327 * 0.6481
=-2.54

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

This Year (Jan14) TTM:Last Year (Jan13) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1266.5 + 1196.6 + 1197.7 + 1142.2 = $4,803 Mil.
Gross Profit was 688.3 + 710 + 671.6 + 657.8 = $2,728 Mil.
Total Current Assets was $901 Mil.
Total Assets was $2,983 Mil.
Property, Plant and Equipment(Net PPE) was $976 Mil.
Depreciation, Depletion and Amortization(DDA) was $191 Mil.
Selling, General & Admin. Expense(SGA) was $2,245 Mil.
Total Current Liabilities was $639 Mil.
Long-Term Debt was $131 Mil.
Net Income was 31.9 + 52.6 + 29.8 + 31.2 = $146 Mil.
Non Operating Income was 0 + 0 + 0 + -7.9 = $-8 Mil.
Cash Flow from Operations was 134.2 + 41 + 116.8 + 59.8 = $352 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1237.5 + 1137.5 + 939.7 + 783.3 = $4,098 Mil.
Gross Profit was 662.1 + 656.6 + 501.6 + 459.9 = $2,280 Mil.
Total Current Assets was $1,114 Mil.
Total Assets was $2,883 Mil.
Property, Plant and Equipment(Net PPE) was $691 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General & Admin. Expense(SGA) was $1,849 Mil.
Total Current Liabilities was $634 Mil.
Long-Term Debt was $515 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)
=(0 / 4803) / (0 / 4098)
=0 / 0
=1

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)
=(710 / 4098) / (688.3 / 4803)
=0.55641776 / 0.56791589
=0.9798

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 - (901.4 + 975.7) / 2983.2) / (1 - (1114 + 691) / 2883)
=0.37077635 / 0.37391606
=0.9916

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
=4803 / 4098
=1.172

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))
=(135.7 / (135.7 + 691)) / (190.5 / (190.5 + 975.7))
=0.16414661 / 0.16335105
=1.0049

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)
=(2244.9 / 4803) / (1848.6 / 4098)
=0.46739538 / 0.4510981
=1.0361

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)
=((131 + 639) / 2983.2) / ((514.6 + 633.5) / 2883)
=0.25811209 / 0.39823101
=0.6481

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
=(145.5 - -7.9 - 351.8) / 2983.2
=-0.0665

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.

Ascena Retail Group Inc has a M-score of -2.54 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.

Ascena Retail Group Inc Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
DSRI 1111111110.7453
GMI 0.9650.98940.93450.98871.05981.0030.93450.72691.01270.9975
AQI 1.168919.86280.84690.86421.16820.81061.10361.15371.2530.9565
SGI 1.06761.3251.29991.09721.01231.03471.58921.22721.15081.406
DEPI 1.12460.88410.93370.9921.00880.99821.16530.83951.12910.7814
SGAI 1.02591.01850.94710.99051.02331.02721.02831.50370.99151.0631
LVGI 0.86461.22560.86780.92790.88570.95641.01540.88141.1980.7638
TATA -0.0512-0.1255-0.1028-0.0565-0.0702-0.0949-0.0557-0.0578-0.066-0.1008
M-score -2.564.75-2.75-2.69-2.66-2.96-2.20-2.70-2.59-2.80

Ascena Retail Group Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 11111110.745311
GMI 0.69310.65850.62721.01271.071.14481.20490.99750.99470.9798
AQI 1.19091.16890.71531.2531.16291.20061.69390.95650.98730.9916
SGI 1.10631.08341.08291.15081.25381.3311.41971.4061.28251.172
DEPI 0.94790.93520.89831.12911.04940.99320.97270.78140.87391.0049
SGAI 1.63151.74421.86560.99150.93630.89640.85141.06311.03971.0361
LVGI 1.30930.88460.9031.1981.52261.46061.30150.76380.63540.6481
TATA -0.0559-0.0732-0.0622-0.066-0.0558-0.0889-0.091-0.1008-0.0959-0.0665
M-score -2.95-2.96-3.14-2.59-2.57-2.58-2.22-2.80-2.59-2.54
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