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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 2.87. The lowest was -4.03. And the median was -2.55.
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 * 1.5861||+||0.528 * 1.0224||+||0.404 * 0.3405||+||0.892 * 0.8758||+||0.115 * 0.8659|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0788||+||4.679 * -0.0122||-||0.327 * 1.0345|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $8.4 Mil.|
Revenue was 101.931 + 87.238 + 94.925 + 79.939 = $364.0 Mil.
Gross Profit was 35.028 + 27.495 + 29.328 + 22.971 = $114.8 Mil.
Total Current Assets was $103.6 Mil.
Total Assets was $168.9 Mil.
Property, Plant and Equipment(Net PPE) was $62.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $162.8 Mil.
Total Current Liabilities was $37.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -5.231 + -7.778 + 25.086 + -29.968 = $-17.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 20.847 + -7.765 + -4.311 + -24.6 = $-15.8 Mil.
|Accounts Receivable was $6.1 Mil.
Revenue was 122.447 + 96.283 + 104.259 + 92.668 = $415.7 Mil.
Gross Profit was 41.68 + 27.863 + 36.316 + 28.187 = $134.0 Mil.
Total Current Assets was $97.4 Mil.
Total Assets was $189.6 Mil.
Property, Plant and Equipment(Net PPE) was $83.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.2 Mil.
Selling, General & Admin. Expense(SGA) was $172.3 Mil.
Total Current Liabilities was $40.2 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)|
|=||(8.411 / 364.033)||/||(6.055 / 415.657)|
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)|
|=||(134.046 / 415.657)||/||(114.822 / 364.033)|
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 - (103.619 + 62.585) / 168.885)||/||(1 - (97.444 + 83.306) / 189.589)|
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))|
|=||(20.194 / (20.194 + 83.306))||/||(18.203 / (18.203 + 62.585))|
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)|
|=||(162.827 / 364.033)||/||(172.34 / 415.657)|
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 + 37.014) / 168.885)||/||((0 + 40.167) / 189.589)|
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|
|=||(-17.891 - 0||-||-15.829)||/||168.885|
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 -2.40 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