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GuruFocus has detected 6 Warning Signs with Bon-Ton Stores Inc $BONT.
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Bon-Ton Stores Inc (NAS:BONT)
Beneish M-Score
-3.90 (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 -3.90 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: -3.9

-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 -2.66.


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 * 0+0.528 * 0.9752+0.404 * 0.8831+0.892 * 0.9587+0.115 * 0.9269
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0142+4.679 * -0.0808-0.327 * 1.0487
=-3.90

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $0 Mil.
Revenue was 900.041 + 607.275 + 558.612 + 608.423 = $2,674 Mil.
Gross Profit was 340.393 + 224.383 + 214.339 + 217.51 = $997 Mil.
Total Current Assets was $830 Mil.
Total Assets was $1,505 Mil.
Property, Plant and Equipment(Net PPE) was $585 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $881 Mil.
Total Current Liabilities was $369 Mil.
Long-Term Debt was $983 Mil.
Net Income was 44.717 + -31.582 + -38.736 + -37.818 = $-63 Mil.
Non Operating Income was -0.076 + -0.676 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 139.936 + -144.541 + 51.291 + 12.278 = $59 Mil.
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.



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)
=(0 / 2674.351) / (60.514 / 2789.497)
=0 / 0.02169352
=0

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)
=(1013.782 / 2789.497) / (996.625 / 2674.351)
=0.36342825 / 0.37266051
=0.9752

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 - (829.748 + 584.803) / 1505.063) / (1 - (815.832 + 635.334) / 1557.206)
=0.06013835 / 0.06809632
=0.8831

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
=2674.351 / 2789.497
=0.9587

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))
=(91.783 / (91.783 + 635.334)) / (92.194 / (92.194 + 584.803))
=0.12622865 / 0.13618081
=0.9269

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)
=(880.628 / 2674.351) / (905.652 / 2789.497)
=0.32928662 / 0.32466498
=1.0142

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)
=((982.634 + 368.847) / 1505.063) / ((989.249 + 344.13) / 1557.206)
=0.89795643 / 0.85626372
=1.0487

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
=(-63.419 - -0.752 - 58.964) / 1505.063
=-0.0808

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 -3.90 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

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.069882.54650.75020.87610.84740.86881.15441.51561.02520
GMI 1.01831.02940.95520.99231.03971.00970.98671.01071.02340.9752
AQI 0.99450.69271.11390.91640.92180.90391.03390.78060.95450.8831
SGI 1.00340.93010.94091.00380.96951.00860.95140.99610.98820.9587
DEPI 0.86811.02120.96091.01351.03081.03321.00690.96110.97520.9269
SGAI 1.00531.04260.99090.97451.02430.99161.00981.01251.01041.0142
LVGI 0.96611.08610.98360.97720.99891.00120.99881.01831.04711.0487
TATA -0.06-0.145-0.115-0.0722-0.0746-0.0528-0.0756-0.0336-0.0441-0.0808
M-score -3.6171.66-3.28-2.95-3.01-2.87-2.73-2.26-2.70-3.90

Bon-Ton Stores Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.81441.51561.08581.18121.05661.02521.13561.01611.02750
GMI 0.99711.01071.02271.0191.03441.02341.01371.01690.98970.9752
AQI 0.92550.78060.71470.88320.89030.95450.97960.83590.84080.8831
SGI 0.95240.99611.01181.00661.00310.98820.97990.9780.97220.9587
DEPI 0.96440.96110.9750.97960.97810.97520.95230.93490.93340.9269
SGAI 1.04031.01250.99590.99520.99171.01041.02031.01921.01881.0142
LVGI 1.02761.01831.021.02571.03361.04711.04221.02531.02531.0487
TATA -0.0123-0.0142-0.0148-0.0445-0.0237-0.0441-0.0678-0.0869-0.0768-0.0808
M-score -2.80-2.17-2.57-2.56-2.57-2.70-2.71-2.97-2.93-3.90
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