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Conn's Inc (NAS:CONN)
Beneish M-Score
-1.28 (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.

Conn's Inc has a M-score of -1.28 signals that the company is a manipulator.

CONN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.13   Max: 9
Current: -1.28

-2.13
9

During the past 13 years, the highest Beneish M-Score of Conn's Inc was 9.00. The lowest was -2.13. And the median was -1.05.


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 Conn's 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 * 1.065+0.528 * 0.9861+0.404 * 0.9614+0.892 * 1.0862+0.115 * 1.1686
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0412+4.679 * 0.2454-0.327 * 1.2346
=-1.28

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $744 Mil.
Revenue was 456.819 + 395.233 + 396.05 + 365.076 = $1,613 Mil.
Gross Profit was 216.188 + 192.332 + 193.589 + 177.943 = $780 Mil.
Total Current Assets was $1,163 Mil.
Total Assets was $2,025 Mil.
Property, Plant and Equipment(Net PPE) was $151 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $443 Mil.
Total Current Liabilities was $146 Mil.
Long-Term Debt was $1,249 Mil.
Net Income was 1.061 + -2.421 + 16.538 + 15.677 = $31 Mil.
Non Operating Income was -80.289 + -73.966 + -71.104 + -66.597 = $-292 Mil.
Cash Flow from Operations was -108.828 + -51.848 + -69.797 + 56.351 = $-174 Mil.
Accounts Receivable was $643 Mil.
Revenue was 426.748 + 370.058 + 352.964 + 335.448 = $1,485 Mil.
Gross Profit was 162.992 + 189.557 + 182.376 + 173.247 = $708 Mil.
Total Current Assets was $926 Mil.
Total Assets was $1,647 Mil.
Property, Plant and Equipment(Net PPE) was $120 Mil.
Depreciation, Depletion and Amortization(DDA) was $22 Mil.
Selling, General & Admin. Expense(SGA) was $391 Mil.
Total Current Liabilities was $145 Mil.
Long-Term Debt was $774 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)
=(743.931 / 1613.178) / (643.094 / 1485.218)
=0.46115866 / 0.43299637
=1.065

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)
=(708.172 / 1485.218) / (780.052 / 1613.178)
=0.4768135 / 0.48354986
=0.9861

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 - (1163 + 151.483) / 2025.3) / (1 - (925.715 + 120.218) / 1647.322)
=0.35096875 / 0.3650707
=0.9614

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
=1613.178 / 1485.218
=1.0862

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))
=(21.604 / (21.604 + 120.218)) / (22.706 / (22.706 + 151.483))
=0.1523318 / 0.13035266
=1.1686

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)
=(442.527 / 1613.178) / (391.311 / 1485.218)
=0.27432001 / 0.26347041
=1.0412

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)
=((1248.879 + 146.125) / 2025.3) / ((774.015 + 145.009) / 1647.322)
=0.68878882 / 0.55788971
=1.2346

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
=(30.855 - -291.956 - -174.122) / 2025.3
=0.2454

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.

Conn's Inc has a M-score of -1.28 signals that the company is likely to 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 own currency.

Conn's Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.08930.149311.01762.17072.91250.92041.22690.90150.98031.065
GMI 1.04320.91251.10340.96730.92250.92740.87260.93051.05360.9861
AQI 1.01621.01983.27971.36252.43781.02760.98570.99620.99640.9614
SGI 1.08291.08341.08080.93930.94481.00221.09181.381.24411.0862
DEPI 0.98731.02410.98480.83920.73481.16921.01671.40631.0651.1686
SGAI 0.9961.15580.95721.07170.97391.00970.98640.96620.92061.045
LVGI 0.8920.80851.68961.06981.57210.92750.85681.14921.06771.2346
TATA 0.24260.35920.30220.27810.08610.10410.24940.38960.31120.2454
M-score -1.12-1.518.98-0.08-0.04-2.05-1.04-0.44-0.80-1.28

Conn's Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.90151.08960.97670.88030.98030.91670.94521.05961.0651.1498
GMI 0.93050.94950.95510.96611.05361.07531.10051.11660.98610.9793
AQI 0.99620.99970.9880.95050.99641.03931.00630.94680.96140.9378
SGI 1.381.39651.39031.31081.24411.18521.14521.11521.08621.0808
DEPI 1.40631.41391.32581.16881.0651.01961.00441.06461.16861.2126
SGAI 0.96690.98350.99761.00160.92060.87720.83110.82041.04121.1069
LVGI 1.14921.17031.15591.10051.06771.03031.0571.18061.23461.2739
TATA 0.38290.35260.36850.33540.29680.29180.27090.2210.24540.2119
M-score -0.47-0.43-0.47-0.80-0.87-0.96-1.07-1.27-1.28-1.40
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