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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 Bon-Ton Stores Inc was 71.60. The lowest was -4.32. 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 Bon-Ton 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 * 1.0858||+||0.528 * 1.0227||+||0.404 * 0.8741||+||0.892 * 1.0118||+||0.115 * 0.975|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9959||+||4.679 * -0.0146||-||0.327 * 1.03|
|This Year (Apr15) TTM:||Last Year (Apr14) TTM:|
|Accounts Receivable was $35 Mil.|
Revenue was 627.242 + 963.469 + 658.757 + 578.137 = $2,828 Mil.
Gross Profit was 222.777 + 350.362 + 249.273 + 220.885 = $1,043 Mil.
Total Current Assets was $825 Mil.
Total Assets was $1,595 Mil.
Property, Plant and Equipment(Net PPE) was $642 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $903 Mil.
Total Current Liabilities was $612 Mil.
Long-Term Debt was $742 Mil.
Net Income was -34.074 + 71.738 + -11.008 + -36.192 = $-10 Mil.
Non Operating Income was 0 + 0 + 0 + -30.894 = $-31 Mil.
Cash Flow from Operations was -17.83 + 153.825 + -101.541 + 10.148 = $45 Mil.
|Accounts Receivable was $32 Mil.
Revenue was 622.533 + 934.619 + 666.573 + 570.985 = $2,795 Mil.
Gross Profit was 229.423 + 351.475 + 253.641 + 219.977 = $1,055 Mil.
Total Current Assets was $793 Mil.
Total Assets was $1,567 Mil.
Property, Plant and Equipment(Net PPE) was $629 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $897 Mil.
Total Current Liabilities was $399 Mil.
Long-Term Debt was $892 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)|
|=||(35.198 / 2827.605)||/||(32.04 / 2794.71)|
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)|
|=||(350.362 / 2794.71)||/||(222.777 / 2827.605)|
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 - (824.776 + 642.268) / 1595.207)||/||(1 - (793.139 + 629.453) / 1566.582)|
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))|
|=||(86.254 / (86.254 + 629.453))||/||(90.589 / (90.589 + 642.268))|
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)|
|=||(903.403 / 2827.605)||/||(896.586 / 2794.71)|
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)|
|=||((741.626 + 611.735) / 1595.207)||/||((891.77 + 398.601) / 1566.582)|
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|
|=||(-9.536 - -30.894||-||44.602)||/||1595.207|
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.
Bon-Ton Stores Inc has a M-score of -2.51 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
Bon-Ton Stores Inc Annual Data
Bon-Ton Stores Inc Quarterly Data