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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

ASNA' s 10-Year Beneish M-Score Range
Min: -3.46   Max: 4.9
Current: -2.92

-3.46
4.9

During the past 13 years, the highest Beneish M-Score of Ascena Retail Group Inc was 4.90. The lowest was -3.46. 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 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 * 0.9998+0.404 * 0.9514+0.892 * 1.0015+0.115 * 1.0599
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.034+4.679 * -0.0967-0.327 * 0.9188
=-2.92

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1288.6 + 1194.2 + 1182.4 + 1145.1 = $4,810 Mil.
Gross Profit was 662 + 694.5 + 586.7 + 675 = $2,618 Mil.
Total Current Assets was $898 Mil.
Total Assets was $3,115 Mil.
Property, Plant and Equipment(Net PPE) was $1,118 Mil.
Depreciation, Depletion and Amortization(DDA) was $204 Mil.
Selling, General & Admin. Expense(SGA) was $2,207 Mil.
Total Current Liabilities was $612 Mil.
Long-Term Debt was $127 Mil.
Net Income was 8.7 + 53.5 + 15.7 + 33.2 = $111 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 189.3 + 23.4 + 131.2 + 68.3 = $412 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1266.5 + 1196.6 + 1197.7 + 1142.2 = $4,803 Mil.
Gross Profit was 661.9 + 693.2 + 600.7 + 657.8 = $2,614 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 $2,131 Mil.
Total Current Liabilities was $639 Mil.
Long-Term Debt was $131 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 / 4810.3) / (0 / 4803)
=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)
=(694.5 / 4803) / (662 / 4810.3)
=0.5441599 / 0.54429038
=0.9998

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 - (897.8 + 1118) / 3114.5) / (1 - (901.4 + 975.7) / 2983.2)
=0.3527693 / 0.37077635
=0.9514

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
=4810.3 / 4803
=1.0015

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))
=(190.5 / (190.5 + 975.7)) / (203.7 / (203.7 + 1118))
=0.16335105 / 0.15411969
=1.0599

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)
=(2206.5 / 4810.3) / (2130.8 / 4803)
=0.4587032 / 0.44363939
=1.034

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)
=((127 + 611.6) / 3114.5) / ((131 + 639) / 2983.2)
=0.23714882 / 0.25811209
=0.9188

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
=(111.1 - 0 - 412.2) / 3114.5
=-0.0967

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 -2.92 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 1111111101
GMI 0.98940.93450.98871.05981.0030.93450.72691.01271.02490.9844
AQI 19.86280.84690.86421.16820.81061.10361.15371.2530.95650.9072
SGI 1.3251.29991.09721.01231.03471.58921.22721.15081.4061.0161
DEPI 0.88410.93370.9921.00880.99821.16530.83951.12910.78141.1847
SGAI 1.01850.94710.99051.02331.02721.02831.50370.99151.02841.0345
LVGI 1.22560.86780.92790.88570.95641.01540.88141.1980.74820.9579
TATA -0.1255-0.1028-0.0565-0.0702-0.0949-0.0557-0.0578-0.066-0.1008-0.0772
M-score 4.75-2.75-2.69-2.66-2.96-2.20-2.70-2.59-3.46-2.84

Ascena Retail Group Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 1110111111
GMI 1.071.14481.20491.02491.02811.02251.01571.00071.00130.9998
AQI 1.16291.20061.69390.95650.98730.99160.93320.90720.92470.9514
SGI 1.25381.3311.41971.4061.28251.1721.07831.01611.0031.0015
DEPI 1.04940.99320.97270.78140.87391.00491.11321.18471.14821.0599
SGAI 0.93630.89640.85141.02840.99830.98350.97751.01421.02591.034
LVGI 1.52261.46061.30150.74820.63540.64810.75130.95790.9730.9188
TATA -0.0558-0.0889-0.091-0.1008-0.0959-0.0665-0.0684-0.0772-0.0689-0.0967
M-score -2.57-2.58-2.22-3.46-2.56-2.51-2.65-2.83-2.81-2.92
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