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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-3.74 (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 -3.74 suggests that the company is not a manipulator.

ASNA' s 10-Year Beneish M-Score Range
Min: -3.74   Max: 5.06
Current: -3.74

-3.74
5.06

During the past 13 years, the highest Beneish M-Score of Ascena Retail Group Inc was 5.06. The lowest was -3.74. 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 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 * 0+0.528 * 1.0115+0.404 * 0.9072+0.892 * 1.0161+0.115 * 1.1847
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0007+4.679 * -0.0772-0.327 * 0.9383
=-3.74

* 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 $0 Mil.
Revenue was 1182.4 + 1145.1 + 1266.5 + 1196.6 = $4,791 Mil.
Gross Profit was 586.7 + 675 + 688.3 + 710 = $2,660 Mil.
Total Current Assets was $924 Mil.
Total Assets was $3,124 Mil.
Property, Plant and Equipment(Net PPE) was $1,111 Mil.
Depreciation, Depletion and Amortization(DDA) was $194 Mil.
Selling, General & Admin. Expense(SGA) was $2,209 Mil.
Total Current Liabilities was $632 Mil.
Long-Term Debt was $172 Mil.
Net Income was 15.7 + 33.2 + 31.9 + 52.6 = $133 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 131.2 + 68.3 + 134.2 + 41 = $375 Mil.
Accounts Receivable was $81 Mil.
Revenue was 1197.7 + 1142.2 + 1237.5 + 1137.5 = $4,715 Mil.
Gross Profit was 671.6 + 657.8 + 662.1 + 656.6 = $2,648 Mil.
Total Current Assets was $943 Mil.
Total Assets was $2,872 Mil.
Property, Plant and Equipment(Net PPE) was $825 Mil.
Depreciation, Depletion and Amortization(DDA) was $176 Mil.
Selling, General & Admin. Expense(SGA) was $2,172 Mil.
Total Current Liabilities was $653 Mil.
Long-Term Debt was $135 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 / 4790.6) / (80.9 / 4714.9)
=0 / 0.01715837
=0

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)
=(675 / 4714.9) / (586.7 / 4790.6)
=0.561645 / 0.55525404
=1.0115

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 - (923.6 + 1110.6) / 3123.8) / (1 - (942.8 + 824.8) / 2871.7)
=0.34880594 / 0.38447609
=0.9072

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
=4790.6 / 4714.9
=1.0161

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))
=(176 / (176 + 824.8)) / (193.6 / (193.6 + 1110.6))
=0.17585931 / 0.14844349
=1.1847

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)
=(2208.6 / 4790.6) / (2172.2 / 4714.9)
=0.46102785 / 0.46070967
=1.0007

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 + 631.9) / 3123.8) / ((135 + 652.6) / 2871.7)
=0.25734682 / 0.27426263
=0.9383

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
=(133.4 - 0 - 374.7) / 3123.8
=-0.0772

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 -3.74 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

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
DSRI 111111111.51810
GMI 0.97280.93450.98871.05981.0030.93450.72691.01270.99751.0115
AQI 20.60150.84270.86841.16820.81061.10361.15371.2530.95650.9072
SGI 1.3251.29991.09721.01231.03471.58921.22721.15081.4061.0161
DEPI 0.87440.93370.9921.00880.99821.16530.83951.12910.78141.1847
SGAI 1.04260.94710.99051.02331.02721.02831.50370.99151.06311.0007
LVGI 1.14020.89530.89940.88570.95641.01540.88141.1980.76380.9383
TATA -0.1255-0.1023-0.0565-0.0702-0.0949-0.0557-0.0578-0.066-0.1008-0.0772
M-score 5.06-2.75-2.68-2.66-2.96-2.20-2.70-2.59-2.09-3.74

Ascena Retail Group Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 111111.51811110
GMI 0.62721.01271.071.14481.20490.99750.99470.97980.97351.0115
AQI 0.71531.2531.16291.20061.69390.95650.98730.99160.93320.9072
SGI 1.08291.15081.25381.3311.41971.4061.28251.1721.07831.0161
DEPI 0.89831.12911.04940.99320.97270.78140.87391.00491.11321.1847
SGAI 1.86560.99150.93630.89640.85141.06311.03971.03611.02931.0007
LVGI 0.9031.1981.52261.46061.30150.76380.63540.64810.75130.9383
TATA -0.0622-0.066-0.0558-0.0889-0.091-0.1008-0.0959-0.0665-0.0684-0.0772
M-score -3.14-2.59-2.57-2.58-2.22-2.09-2.59-2.54-2.68-3.74
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