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Conn's Inc (NAS:CONN)
Beneish M-Score
-1.57 (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 -1.57 signals that the company is a manipulator.

CONN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.98   Max: 8.17
Current: -1.57

-3.98
8.17

During the past 13 years, the highest Beneish M-Score of Conn's Inc was 8.17. The lowest was -3.98. And the median was -2.10.


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 * 1.0596+0.528 * 0.9707+0.404 * 0.9468+0.892 * 1.1152+0.115 * 0.8837
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0691+4.679 * 0.1862-0.327 * 1.1806
=-1.57

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $707 Mil.
Revenue was 395.233 + 396.05 + 365.076 + 426.748 = $1,583 Mil.
Gross Profit was 192.332 + 193.589 + 177.943 + 201.535 = $765 Mil.
Total Current Assets was $1,278 Mil.
Total Assets was $2,089 Mil.
Property, Plant and Equipment(Net PPE) was $139 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $423 Mil.
Total Current Liabilities was $204 Mil.
Long-Term Debt was $1,159 Mil.
Net Income was -2.421 + 16.538 + 15.677 + 15.458 = $45 Mil.
Non Operating Income was -1.367 + -71.104 + -66.597 + -76.291 = $-215 Mil.
Cash Flow from Operations was -51.848 + -69.797 + 56.351 + -63.107 = $-128 Mil.
Accounts Receivable was $598 Mil.
Revenue was 370.058 + 352.964 + 335.448 + 361.141 = $1,420 Mil.
Gross Profit was 176.341 + 182.376 + 161.084 + 146.41 = $666 Mil.
Total Current Assets was $911 Mil.
Total Assets was $1,556 Mil.
Property, Plant and Equipment(Net PPE) was $117 Mil.
Depreciation, Depletion and Amortization(DDA) was $18 Mil.
Selling, General & Admin. Expense(SGA) was $355 Mil.
Total Current Liabilities was $163 Mil.
Long-Term Debt was $696 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)
=(706.934 / 1583.107) / (598.241 / 1419.611)
=0.44654846 / 0.42141192
=1.0596

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)
=(193.589 / 1419.611) / (192.332 / 1583.107)
=0.46929124 / 0.48347901
=0.9707

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 - (1277.63 + 139.163) / 2088.843) / (1 - (910.646 + 116.585) / 1556.006)
=0.32173313 / 0.33982838
=0.9468

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
=1583.107 / 1419.611
=1.1152

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))
=(17.923 / (17.923 + 116.585)) / (24.71 / (24.71 + 139.163))
=0.13324858 / 0.1507875
=0.8837

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)
=(422.899 / 1583.107) / (354.701 / 1419.611)
=0.26713229 / 0.24985788
=1.0691

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)
=((1158.746 + 203.639) / 2088.843) / ((696.31 + 163.337) / 1556.006)
=0.65221991 / 0.55247023
=1.1806

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
=(45.252 - -215.359 - -128.401) / 2088.843
=0.1862

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 -1.57 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 0.81411.08740.149311.01766.1410.99071.07350.97511.01060.9803
GMI 1.03480.93471.01511.10340.8960.93380.96780.89170.99030.9901
AQI 0.76041.01621.01983.27973.41190.96731.03420.98570.99620.9964
SGI 1.23641.08491.08341.08080.98120.92540.97961.09181.381.2441
DEPI 0.93480.98731.02410.98480.87980.77380.98021.09841.40631.065
SGAI 0.96661.13491.00640.95721.0181.02221.05150.950.85791.0368
LVGI 1.1260.8920.80851.68961.8240.91090.93890.85681.1261.0896
TATA -0.06470.02730.12080.1326-0.0679-0.0707-0.07290.08370.2340.3112
M-score -2.86-2.21-2.548.182.55-2.93-2.77-2.03-1.01-0.86

Conn's Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.18741.05961.01061.08960.97670.88030.98030.91670.94521.0596
GMI 0.87830.91080.99031.02621.02641.05540.9720.96080.98940.9707
AQI 0.98760.98860.99620.99970.9880.95050.99641.03931.00630.9468
SGI 1.1911.28721.381.39651.39031.31081.24411.18521.14521.1152
DEPI 1.02911.27671.40631.41391.32581.29591.0651.01961.00440.8837
SGAI 0.98010.99860.85790.84480.86750.84561.06711.08831.01921.0691
LVGI 0.88270.96611.1261.17031.15591.10051.08961.03031.0571.1806
TATA 0.15250.24260.27550.28260.34390.31240.31120.29950.27090.1862
M-score -1.45-1.04-0.82-0.69-0.53-0.81-0.87-1.02-1.16-1.57
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