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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 71.67. The lowest was -4.15. And the median was -2.69.
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 * 1.0252||+||0.528 * 1.0234||+||0.404 * 0.8464||+||0.892 * 0.9882||+||0.115 * 0.9752|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0104||+||4.679 * -0.0441||-||0.327 * 1.0379|
|This Year (Jan16) TTM:||Last Year (Jan15) TTM:|
|Accounts Receivable was $61 Mil.|
Revenue was 950.359 + 640.897 + 570.999 + 627.242 = $2,789 Mil.
Gross Profit was 344.962 + 225.872 + 220.171 + 222.777 = $1,014 Mil.
Total Current Assets was $816 Mil.
Total Assets was $1,557 Mil.
Property, Plant and Equipment(Net PPE) was $635 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $906 Mil.
Total Current Liabilities was $344 Mil.
Long-Term Debt was $989 Mil.
Net Income was 50.576 + -33.992 + -39.563 + -34.074 = $-57 Mil.
Non Operating Income was -1.346 + 0 + -4.862 + 0 = $-6 Mil.
Cash Flow from Operations was 158.561 + -151.703 + 28.794 + -17.83 = $18 Mil.
|Accounts Receivable was $60 Mil.
Revenue was 963.469 + 658.757 + 578.137 + 622.533 = $2,823 Mil.
Gross Profit was 350.362 + 249.273 + 220.885 + 229.423 = $1,050 Mil.
Total Current Assets was $837 Mil.
Total Assets was $1,609 Mil.
Property, Plant and Equipment(Net PPE) was $642 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $907 Mil.
Total Current Liabilities was $431 Mil.
Long-Term Debt was $896 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)|
|=||(60.514 / 2789.497)||/||(59.734 / 2822.896)|
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)|
|=||(225.872 / 2822.896)||/||(344.962 / 2789.497)|
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 - (815.832 + 635.334) / 1557.206)||/||(1 - (837.103 + 641.996) / 1608.514)|
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))|
|=||(90.118 / (90.118 + 641.996))||/||(91.783 / (91.783 + 635.334))|
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)|
|=||(905.652 / 2789.497)||/||(907.036 / 2822.896)|
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)|
|=||((989.249 + 344.13) / 1557.206)||/||((895.979 + 430.979) / 1608.514)|
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|
|=||(-57.053 - -6.208||-||17.822)||/||1557.206|
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 -2.74 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