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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 * 0.8144||+||0.528 * 0.9971||+||0.404 * 0.9255||+||0.892 * 0.9524||+||0.115 * 0.9644|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0403||+||4.679 * -0.0123||-||0.327 * 1.0276|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $35 Mil.|
Revenue was 658.757 + 578.137 + 622.533 + 934.619 = $2,794 Mil.
Gross Profit was 249.273 + 220.885 + 229.423 + 351.475 = $1,051 Mil.
Total Current Assets was $1,057 Mil.
Total Assets was $1,830 Mil.
Property, Plant and Equipment(Net PPE) was $637 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $907 Mil.
Total Current Liabilities was $598 Mil.
Long-Term Debt was $1,018 Mil.
Net Income was -11.008 + -36.192 + -31.512 + 61.339 = $-17 Mil.
Non Operating Income was 0 + -30.894 + -0.153 + -0.136 = $-31 Mil.
Cash Flow from Operations was -101.541 + 10.148 + -15.803 + 143.458 = $36 Mil.
|Accounts Receivable was $45 Mil.
Revenue was 666.573 + 570.985 + 661.883 + 1034.159 = $2,934 Mil.
Gross Profit was 253.641 + 219.977 + 240.295 + 386.42 = $1,100 Mil.
Total Current Assets was $1,014 Mil.
Total Assets was $1,809 Mil.
Property, Plant and Equipment(Net PPE) was $650 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $915 Mil.
Total Current Liabilities was $572 Mil.
Long-Term Debt was $981 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)|
|=||(35.264 / 2794.046)||/||(45.461 / 2933.6)|
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)|
|=||(220.885 / 2933.6)||/||(249.273 / 2794.046)|
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 - (1057.224 + 637.217) / 1829.98)||/||(1 - (1013.805 + 649.966) / 1808.501)|
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))|
|=||(86.431 / (86.431 + 649.966))||/||(88.302 / (88.302 + 637.217))|
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)|
|=||(906.837 / 2794.046)||/||(915.207 / 2933.6)|
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)|
|=||((1017.642 + 597.738) / 1829.98)||/||((981.385 + 572.225) / 1808.501)|
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|
|=||(-17.373 - -31.183||-||36.262)||/||1829.98|
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 -2.80 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