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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-3.11 (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 -3.11 suggests that the company is not a manipulator.

ASNA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.89   Max: 4.9
Current: -3.11

-3.89
4.9

During the past 13 years, the highest Beneish M-Score of Ascena Retail Group Inc was 4.90. The lowest was -3.89. And the median was -2.73.


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 * 1.0224+0.404 * 1.3445+0.892 * 1.1029+0.115 * 1.105
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0456+4.679 * -0.1154-0.327 * 2.0187
=-3.11

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $134 Mil.
Revenue was 1672 + 1169.8 + 1150.3 + 1288.6 = $5,281 Mil.
Gross Profit was 896.1 + 637.6 + 675.1 + 662 = $2,871 Mil.
Total Current Assets was $1,534 Mil.
Total Assets was $5,806 Mil.
Property, Plant and Equipment(Net PPE) was $1,619 Mil.
Depreciation, Depletion and Amortization(DDA) was $250 Mil.
Selling, General & Admin. Expense(SGA) was $2,562 Mil.
Total Current Liabilities was $1,020 Mil.
Long-Term Debt was $2,211 Mil.
Net Income was -18.1 + -323.4 + 24.4 + 8.7 = $-308 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -46.4 + 148 + 70.6 + 189.3 = $362 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1194.2 + 1182.4 + 1145.1 + 1266.5 = $4,788 Mil.
Gross Profit was 694.5 + 647.2 + 657.7 + 661.9 = $2,661 Mil.
Total Current Assets was $997 Mil.
Total Assets was $3,233 Mil.
Property, Plant and Equipment(Net PPE) was $1,138 Mil.
Depreciation, Depletion and Amortization(DDA) was $198 Mil.
Selling, General & Admin. Expense(SGA) was $2,222 Mil.
Total Current Liabilities was $655 Mil.
Long-Term Debt was $236 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)
=(133.8 / 5280.7) / (0 / 4788.2)
=0.02533755 / 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)
=(637.6 / 4788.2) / (896.1 / 5280.7)
=0.55580385 / 0.54364005
=1.0224

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 - (1534.1 + 1619.3) / 5805.5) / (1 - (996.7 + 1138) / 3233.3)
=0.45682542 / 0.3397767
=1.3445

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
=5280.7 / 4788.2
=1.1029

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))
=(197.5 / (197.5 + 1138)) / (250.2 / (250.2 + 1619.3))
=0.14788469 / 0.13383258
=1.105

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)
=(2562 / 5280.7) / (2221.8 / 4788.2)
=0.48516295 / 0.46401571
=1.0456

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)
=((2211.1 + 1019.6) / 5805.5) / ((236 + 655.3) / 3233.3)
=0.55648954 / 0.27566264
=2.0187

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
=(-308.4 - 0 - 361.5) / 5805.5
=-0.1154

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 -3.11 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

Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15
DSRI 1111111010.7777
GMI 0.93450.98871.05981.0030.93450.72691.01271.02490.98440.9991
AQI 0.84690.86421.16820.81061.10361.15371.2530.95650.90720.7825
SGI 1.29991.09721.01231.03471.58921.22721.15081.4061.01611.0026
DEPI 0.93370.9921.00880.99821.16530.83951.12910.78141.18470.9444
SGAI 0.94710.99051.02331.02721.02831.50370.99151.02841.03451.0603
LVGI 0.86780.92790.88570.95641.01540.88141.1980.74821.2541.0945
TATA -0.1028-0.0565-0.0702-0.0949-0.0557-0.0578-0.066-0.1008-0.0772-0.2291
M-score -2.75-2.69-2.66-2.96-2.20-2.70-2.59-3.46-2.94-3.89

Ascena Retail Group Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 011111110.77771
GMI 1.02491.02811.02251.02240.98440.98510.98350.97760.99911.0224
AQI 0.95650.98730.99160.93320.90720.92470.95140.95980.78251.3445
SGI 1.4061.28251.1721.07831.01611.0031.00151.0021.00261.1029
DEPI 0.78140.87391.00491.11321.18471.14821.05991.00040.94441.105
SGAI 1.02840.99830.98350.96961.03451.04621.05421.06971.06031.0456
LVGI 0.74820.63540.64810.75131.2540.9730.91880.92511.09452.0187
TATA -0.1008-0.0959-0.0665-0.0684-0.0772-0.0689-0.0967-0.0969-0.2291-0.1154
M-score -3.46-2.56-2.51-2.65-2.94-2.82-2.94-2.95-3.89-3.11
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