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GuruFocus has detected 5 Warning Signs with Bon-Ton Stores Inc $BONT.
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Bon-Ton Stores Inc (NAS:BONT)
Beneish M-Score
-2.93 (As of Today)

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.

Bon-Ton Stores Inc has a M-score of -2.93 suggests that the company is not a manipulator.

BONT' s Beneish M-Score Range Over the Past 10 Years
Min: -4.15   Max: 71.67
Current: -2.93

-4.15
71.67

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 -2.71.


Definition

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 * 1.0275+0.528 * 0.9897+0.404 * 0.8408+0.892 * 0.9722+0.115 * 0.9334
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0188+4.679 * -0.0768-0.327 * 1.0253
=-2.93

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $37 Mil.
Revenue was 607.275 + 558.612 + 608.423 + 950.359 = $2,725 Mil.
Gross Profit was 224.383 + 214.339 + 217.51 + 344.962 = $1,001 Mil.
Total Current Assets was $1,032 Mil.
Total Assets was $1,734 Mil.
Property, Plant and Equipment(Net PPE) was $606 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $893 Mil.
Total Current Liabilities was $573 Mil.
Long-Term Debt was $1,049 Mil.
Net Income was -31.582 + -38.736 + -37.818 + 50.576 = $-58 Mil.
Non Operating Income was -0.676 + 0 + 0 + -1.346 = $-2 Mil.
Cash Flow from Operations was -144.541 + 51.291 + 12.278 + 158.561 = $78 Mil.
Accounts Receivable was $37 Mil.
Revenue was 640.897 + 570.999 + 627.242 + 963.469 = $2,803 Mil.
Gross Profit was 225.872 + 220.171 + 222.777 + 350.362 = $1,019 Mil.
Total Current Assets was $1,099 Mil.
Total Assets was $1,865 Mil.
Property, Plant and Equipment(Net PPE) was $644 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $902 Mil.
Total Current Liabilities was $671 Mil.
Long-Term Debt was $1,031 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(37.335 / 2724.669) / (37.375 / 2802.607)
=0.01370258 / 0.0133358
=1.0275

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1019.182 / 2802.607) / (1001.194 / 2724.669)
=0.36365498 / 0.36745528
=0.9897

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1031.89 + 606.382) / 1734.426) / (1 - (1098.796 + 643.511) / 1865.301)
=0.05543851 / 0.06593788
=0.8408

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2724.669 / 2802.607
=0.9722

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))
=(91.452 / (91.452 + 643.511)) / (93.268 / (93.268 + 606.382))
=0.12443075 / 0.13330665
=0.9334

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)
=(893.47 / 2724.669) / (902.064 / 2802.607)
=0.32791873 / 0.32186603
=1.0188

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)
=((1049.188 + 573.304) / 1734.426) / ((1030.736 + 671.074) / 1865.301)
=0.93546338 / 0.91235141
=1.0253

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-57.56 - -2.022 - 77.589) / 1734.426
=-0.0768

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 -2.93 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Bon-Ton Stores Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 10.069882.54650.75020.87610.84740.86881.15441.51561.0252
GMI 0.95951.01831.02940.95520.99231.03971.00970.98671.01071.0234
AQI 1.32810.99450.69271.11390.91640.92180.90391.03390.78060.899
SGI 2.64291.00340.93010.94091.00380.96951.00860.95140.99610.9882
DEPI 1.31690.86811.02120.96091.01351.03081.03321.00690.96110.9752
SGAI 0.98181.00531.04260.99090.97451.02430.99161.00981.01251.0104
LVGI 1.95190.96611.08610.98360.97720.99891.00120.99881.01831.0463
TATA -0.0332-0.06-0.145-0.115-0.0722-0.0746-0.0528-0.0756-0.0336-0.0443
M-score -1.33-3.6171.66-3.28-2.95-3.01-2.87-2.73-2.26-2.72

Bon-Ton Stores Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.13050.81441.51561.08581.18121.05661.02521.13561.01611.0275
GMI 0.99490.99711.01071.02271.0191.03441.02341.01371.01690.9897
AQI 0.94170.92550.78060.71470.88320.89030.8990.97960.83590.8408
SGI 0.94970.95240.99611.01181.00661.00310.98820.97990.9780.9722
DEPI 0.97970.96440.96110.9750.97960.97810.97520.95230.93490.9334
SGAI 1.02591.04031.01250.99590.99520.99171.01041.02031.01921.0188
LVGI 1.01971.02761.01831.021.02571.03361.04631.04221.02531.0253
TATA -0.0486-0.0292-0.0336-0.0345-0.0445-0.0237-0.0443-0.0678-0.0869-0.0768
M-score -2.67-2.88-2.26-2.66-2.56-2.57-2.72-2.71-2.97-2.93
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