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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.
During the past 13 years, the highest Beneish M-Score of bebe stores Inc was 2.74. The lowest was -4.03. And the median was -2.73.
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 bebe stores 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 * 1.3178||+||0.528 * 1.0025||+||0.404 * 0.7441||+||0.892 * 1.0194||+||0.115 * 1.1944|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9705||+||4.679 * -0.1339||-||0.327 * 1.3658|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $6.2 Mil.|
Revenue was 92.668 + 128.914 + 102.156 + 103.569 = $427.3 Mil.
Gross Profit was 28.187 + 47.907 + 32.77 + 32.005 = $140.9 Mil.
Total Current Assets was $121.2 Mil.
Total Assets was $225.2 Mil.
Property, Plant and Equipment(Net PPE) was $93.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.4 Mil.
Selling, General & Admin. Expense(SGA) was $185.1 Mil.
Total Current Liabilities was $44.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -11.246 + -0.385 + -10.817 + -34.486 = $-56.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -16.885 + 15.116 + -19.834 + -5.184 = $-26.8 Mil.
|Accounts Receivable was $4.6 Mil.
Revenue was 89.019 + 123.261 + 109.268 + 97.638 = $419.2 Mil.
Gross Profit was 24.5 + 42 + 39.622 + 32.414 = $138.5 Mil.
Total Current Assets was $178.4 Mil.
Total Assets was $292.1 Mil.
Property, Plant and Equipment(Net PPE) was $96.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.7 Mil.
Selling, General & Admin. Expense(SGA) was $187.1 Mil.
Total Current Liabilities was $41.8 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(6.206 / 427.307)||/||(4.62 / 419.186)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(47.907 / 419.186)||/||(28.187 / 427.307)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (121.19 + 93.924) / 225.176)||/||(1 - (178.414 + 96.146) / 292.101)|
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.
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))|
|=||(20.71 / (20.71 + 96.146))||/||(16.365 / (16.365 + 93.924))|
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)|
|=||(185.083 / 427.307)||/||(187.093 / 419.186)|
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)|
|=||((0 + 43.959) / 225.176)||/||((0 + 41.752) / 292.101)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-56.934 - 0||-||-26.787)||/||225.176|
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.
bebe stores Inc has a M-score of -2.99 suggests that the company will not be a manipulator.
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
bebe stores Inc Annual Data
bebe stores Inc Quarterly Data