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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

ASNA' s 10-Year Beneish M-Score Range
Min: -3.46   Max: 4.9
Current: -2.95

-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 -2.72.


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 * 0.9776+0.404 * 0.9598+0.892 * 1.002+0.115 * 1.0004
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0697+4.679 * -0.0969-0.327 * 0.9251
=-2.95

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1150.3 + 1288.6 + 1194.2 + 1182.4 = $4,816 Mil.
Gross Profit was 675.1 + 662 + 694.5 + 647.2 = $2,679 Mil.
Total Current Assets was $983 Mil.
Total Assets was $3,220 Mil.
Property, Plant and Equipment(Net PPE) was $1,139 Mil.
Depreciation, Depletion and Amortization(DDA) was $212 Mil.
Selling, General & Admin. Expense(SGA) was $2,286 Mil.
Total Current Liabilities was $647 Mil.
Long-Term Debt was $155 Mil.
Net Income was 24.4 + 8.7 + 53.5 + 15.7 = $102 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 70.6 + 189.3 + 23.4 + 131.2 = $415 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1145.1 + 1266.5 + 1196.6 + 1197.7 = $4,806 Mil.
Gross Profit was 657.7 + 661.9 + 693.2 + 600.7 = $2,614 Mil.
Total Current Assets was $960 Mil.
Total Assets was $3,110 Mil.
Property, Plant and Equipment(Net PPE) was $1,044 Mil.
Depreciation, Depletion and Amortization(DDA) was $195 Mil.
Selling, General & Admin. Expense(SGA) was $2,133 Mil.
Total Current Liabilities was $612 Mil.
Long-Term Debt was $224 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 / 4815.5) / (0 / 4805.9)
=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)
=(662 / 4805.9) / (675.1 / 4815.5)
=0.54381073 / 0.55628699
=0.9776

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 - (983.1 + 1138.5) / 3220.4) / (1 - (960.2 + 1044) / 3109.7)
=0.34119985 / 0.35550053
=0.9598

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
=4815.5 / 4805.9
=1.002

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))
=(194.5 / (194.5 + 1044)) / (212 / (212 + 1138.5))
=0.15704481 / 0.1569789
=1.0004

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)
=(2286.2 / 4815.5) / (2133 / 4805.9)
=0.47475859 / 0.44382946
=1.0697

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)
=((155 + 646.7) / 3220.4) / ((224.4 + 612.4) / 3109.7)
=0.24894423 / 0.26909348
=0.9251

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
=(102.3 - 0 - 414.5) / 3220.4
=-0.0969

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 -2.95 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 1101111111
GMI 1.14481.20491.02491.02811.02251.02240.98440.98510.98350.9776
AQI 1.20061.69390.95650.98730.99160.93320.90720.92470.95140.9598
SGI 1.3311.41971.4061.28251.1721.07831.01611.0031.00151.002
DEPI 0.99320.97270.78140.87391.00491.11321.18471.14821.05991.0004
SGAI 0.89640.85141.02840.99830.98350.96961.03451.04621.05421.0697
LVGI 1.46061.30150.74820.63540.64810.75130.95790.9730.91880.9251
TATA -0.0889-0.091-0.1008-0.0959-0.0665-0.0684-0.0772-0.0689-0.0967-0.0969
M-score -2.58-2.22-3.46-2.56-2.51-2.65-2.84-2.82-2.94-2.95
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