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Ascena Retail Group Inc (NAS:ASNA)
Beneish M-Score
-2.49 (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 -2.49 suggests that the company is not a manipulator.

ASNA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.89   Max: 4.98
Current: -2.49

-3.89
4.98

During the past 13 years, the highest Beneish M-Score of Ascena Retail Group Inc was 4.98. The lowest was -3.89. 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 * 0.8214+0.528 * 0.9937+0.404 * 1.7695+0.892 * 1.4565+0.115 * 0.8715
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9891+4.679 * -0.0832-0.327 * 1.4836
=-2.49

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

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Accounts Receivable was $85 Mil.
Revenue was 1812.3 + 1669.3 + 1841.8 + 1672 = $6,995 Mil.
Gross Profit was 1041.3 + 1016.7 + 958.1 + 896.1 = $3,912 Mil.
Total Current Assets was $1,240 Mil.
Total Assets was $5,506 Mil.
Property, Plant and Equipment(Net PPE) was $1,630 Mil.
Depreciation, Depletion and Amortization(DDA) was $359 Mil.
Selling, General & Admin. Expense(SGA) was $3,382 Mil.
Total Current Liabilities was $1,014 Mil.
Long-Term Debt was $1,982 Mil.
Net Income was 13.8 + 15 + -22.6 + -18.1 = $-12 Mil.
Non Operating Income was 0 + 0 + 0.8 + 0 = $1 Mil.
Cash Flow from Operations was 282 + 2.2 + 207.6 + -46.4 = $445 Mil.
Accounts Receivable was $71 Mil.
Revenue was 1169.8 + 1150.3 + 1288.6 + 1194.2 = $4,803 Mil.
Gross Profit was 637.6 + 675.1 + 662 + 694.5 = $2,669 Mil.
Total Current Assets was $950 Mil.
Total Assets was $2,906 Mil.
Property, Plant and Equipment(Net PPE) was $1,170 Mil.
Depreciation, Depletion and Amortization(DDA) was $218 Mil.
Selling, General & Admin. Expense(SGA) was $2,348 Mil.
Total Current Liabilities was $718 Mil.
Long-Term Debt was $348 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)
=(84.7 / 6995.4) / (70.8 / 4802.9)
=0.01210796 / 0.01474109
=0.8214

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)
=(2669.2 / 4802.9) / (3912.2 / 6995.4)
=0.55574757 / 0.55925322
=0.9937

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 - (1240 + 1630.1) / 5506.3) / (1 - (949.9 + 1170) / 2906.2)
=0.47876069 / 0.27055949
=1.7695

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
=6995.4 / 4802.9
=1.4565

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))
=(218.2 / (218.2 + 1170)) / (358.7 / (358.7 + 1630.1))
=0.15718196 / 0.18036002
=0.8715

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)
=(3382.3 / 6995.4) / (2347.8 / 4802.9)
=0.48350345 / 0.48882967
=0.9891

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)
=((1981.6 + 1013.7) / 5506.3) / ((347.9 + 717.7) / 2906.2)
=0.5439769 / 0.36666437
=1.4836

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
=(-11.9 - 0.8 - 445.4) / 5506.3
=-0.0832

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 -2.49 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

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 111111010.77770.8214
GMI 0.98871.05981.0030.93450.72691.02971.00790.98440.99910.9896
AQI 0.86421.16820.81061.10361.15371.2530.95650.90720.77571.7695
SGI 1.09721.01231.03471.58921.22721.15081.4061.01611.00261.4565
DEPI 0.9921.00880.99821.16530.83951.12910.78141.18470.94440.8715
SGAI 0.99051.02331.02721.02831.50370.97031.05091.03451.06030.9939
LVGI 0.92790.88570.95641.01540.88141.1980.74821.2541.08841.4836
TATA -0.0565-0.0702-0.0949-0.0557-0.0578-0.066-0.1008-0.0772-0.2299-0.0832
M-score -2.69-2.66-2.96-2.20-2.70-2.58-3.47-2.94-3.89-2.49

Ascena Retail Group Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 111110.77771110.8214
GMI 1.00960.98440.98510.98350.97760.99911.02241.01921.00730.9937
AQI 0.93320.90720.92470.95140.95980.77571.34451.36381.4051.7695
SGI 1.07831.01611.0031.00151.0021.00261.10291.21281.31931.4565
DEPI 1.11321.18471.14821.05991.00040.94441.1051.0140.94820.8715
SGAI 0.98461.03451.04621.05421.06971.06031.04561.04211.03620.9891
LVGI 0.75131.2540.9730.91880.92511.08842.01872.30452.19251.4836
TATA -0.0684-0.0772-0.0689-0.0967-0.0969-0.2299-0.1154-0.1315-0.1206-0.0832
M-score -2.66-2.94-2.82-2.94-2.95-3.89-3.11-3.18-2.99-2.49
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