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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 -2.61.
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 * 1.0074||+||0.528 * 1.0554||+||0.404 * 0.3003||+||0.892 * 0.9073||+||0.115 * 1.0702|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0525||+||4.679 * -0.1468||-||0.327 * 1.4252|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $6.4 Mil.|
Revenue was 102.156 + 87.546 + 93.47 + 129.974 = $413.1 Mil.
Gross Profit was 32.77 + 28.56 + 25.292 + 43.655 = $130.3 Mil.
Total Current Assets was $140.4 Mil.
Total Assets was $246.2 Mil.
Property, Plant and Equipment(Net PPE) was $94.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $189.8 Mil.
Total Current Liabilities was $48.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -10.817 + -34.486 + -24.276 + -5.465 = $-75.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -19.834 + -5.184 + -19.861 + 5.984 = $-38.9 Mil.
|Accounts Receivable was $7.1 Mil.
Revenue was 109.268 + 97.638 + 112.905 + 135.535 = $455.3 Mil.
Gross Profit was 39.622 + 32.414 + 33.578 + 45.928 = $151.5 Mil.
Total Current Assets was $177.8 Mil.
Total Assets was $332.8 Mil.
Property, Plant and Equipment(Net PPE) was $102.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.5 Mil.
Selling, General & Admin. Expense(SGA) was $198.8 Mil.
Total Current Liabilities was $46.0 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)|
|=||(6.447 / 413.146)||/||(7.053 / 455.346)|
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)|
|=||(28.56 / 455.346)||/||(32.77 / 413.146)|
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 - (140.384 + 94.118) / 246.203)||/||(1 - (177.77 + 102.362) / 332.805)|
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))|
|=||(21.512 / (21.512 + 102.362))||/||(18.23 / (18.23 + 94.118))|
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)|
|=||(189.846 / 413.146)||/||(198.798 / 455.346)|
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 + 48.496) / 246.203)||/||((0 + 45.997) / 332.805)|
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|
|=||(-75.044 - 0||-||-38.895)||/||246.203|
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 -3.64 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