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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

ASNA' s 10-Year Beneish M-Score Range
Min: -3.46   Max: 4.9
Current: -2.82

-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 * 0.9913+0.404 * 0.9247+0.892 * 1.003+0.115 * 1.1482
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0383+4.679 * -0.0689-0.327 * 0.973
=-2.82

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1194.2 + 1182.4 + 1145.1 + 1266.5 = $4,788 Mil.
Gross Profit was 694.5 + 586.7 + 675 + 688.3 = $2,645 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 $2,205 Mil.
Total Current Liabilities was $655 Mil.
Long-Term Debt was $236 Mil.
Net Income was 53.5 + 15.7 + 33.2 + 31.9 = $134 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 23.4 + 131.2 + 68.3 + 134.2 = $357 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1196.6 + 1197.7 + 1142.2 + 1237.5 = $4,774 Mil.
Gross Profit was 693.2 + 600.7 + 657.8 + 662.1 = $2,614 Mil.
Total Current Assets was $1,005 Mil.
Total Assets was $3,019 Mil.
Property, Plant and Equipment(Net PPE) was $905 Mil.
Depreciation, Depletion and Amortization(DDA) was $185 Mil.
Selling, General & Admin. Expense(SGA) was $2,117 Mil.
Total Current Liabilities was $667 Mil.
Long-Term Debt was $188 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 / 4788.2) / (0 / 4774)
=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)
=(586.7 / 4774) / (694.5 / 4788.2)
=0.54750733 / 0.55229523
=0.9913

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 - (996.7 + 1138) / 3233.3) / (1 - (1004.9 + 904.5) / 3018.6)
=0.3397767 / 0.36745511
=0.9247

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
=4788.2 / 4774
=1.003

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))
=(185 / (185 + 904.5)) / (197.5 / (197.5 + 1138))
=0.16980266 / 0.14788469
=1.1482

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)
=(2205 / 4788.2) / (2117.3 / 4774)
=0.46050708 / 0.44350649
=1.0383

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)
=((236 + 655.3) / 3233.3) / ((188 + 667.2) / 3018.6)
=0.27566264 / 0.28331014
=0.973

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
=(134.3 - 0 - 357.1) / 3233.3
=-0.0689

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 -2.82 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

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 1111011111
GMI 1.01271.071.14481.20491.02491.02811.01231.00560.99070.9913
AQI 1.2531.16291.20061.69390.95650.98730.99160.93320.90720.9247
SGI 1.15081.25381.3311.41971.4061.28251.1721.07831.01611.003
DEPI 1.12911.04940.99320.97270.78140.87391.00491.11321.18471.1482
SGAI 0.99150.93630.89640.85141.02840.99830.99570.98951.02661.0383
LVGI 1.1981.52261.46061.30150.74820.63540.64810.75130.95790.973
TATA -0.066-0.0558-0.0889-0.091-0.1008-0.0959-0.0665-0.0684-0.0772-0.0689
M-score -2.59-2.57-2.58-2.22-3.46-2.56-2.52-2.66-2.84-2.82
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