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Conn's Inc (NAS:CONN)
Beneish M-Score
-1.41 (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 -1.41 signals that the company is a manipulator.

CONN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.98   Max: 9
Current: -1.41

-3.98
9

During the past 13 years, the highest Beneish M-Score of Conn's Inc was 9.00. The lowest was -3.98. And the median was -1.24.


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 * 1.1498+0.528 * 0.996+0.404 * 0.9378+0.892 * 1.0808+0.115 * 0.9943
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0643+4.679 * 0.2119-0.327 * 1.2739
=-1.41

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $812 Mil.
Revenue was 389.113 + 456.819 + 395.233 + 396.05 = $1,637 Mil.
Gross Profit was 184.647 + 216.188 + 192.332 + 193.589 = $787 Mil.
Total Current Assets was $1,133 Mil.
Total Assets was $1,997 Mil.
Property, Plant and Equipment(Net PPE) was $164 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $461 Mil.
Total Current Liabilities was $162 Mil.
Long-Term Debt was $1,203 Mil.
Net Income was -9.749 + 1.061 + -2.421 + 16.538 = $5 Mil.
Non Operating Income was -70.571 + -80.289 + -73.966 + -71.104 = $-296 Mil.
Cash Flow from Operations was 108.653 + -108.828 + -51.848 + -69.797 = $-122 Mil.
Accounts Receivable was $653 Mil.
Revenue was 365.076 + 426.748 + 370.058 + 352.964 = $1,515 Mil.
Gross Profit was 177.943 + 201.535 + 176.341 + 169.212 = $725 Mil.
Total Current Assets was $888 Mil.
Total Assets was $1,613 Mil.
Property, Plant and Equipment(Net PPE) was $122 Mil.
Depreciation, Depletion and Amortization(DDA) was $18 Mil.
Selling, General & Admin. Expense(SGA) was $400 Mil.
Total Current Liabilities was $146 Mil.
Long-Term Debt was $720 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)
=(811.637 / 1637.215) / (653.141 / 1514.846)
=0.49574247 / 0.43116
=1.1498

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)
=(725.031 / 1514.846) / (786.756 / 1637.215)
=0.47861697 / 0.48054532
=0.996

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 - (1133.487 + 163.626) / 1996.825) / (1 - (887.878 + 122.189) / 1612.672)
=0.35041228 / 0.37366867
=0.9378

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
=1637.215 / 1514.846
=1.0808

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))
=(18.225 / (18.225 + 122.189)) / (24.565 / (24.565 + 163.626))
=0.12979475 / 0.13053228
=0.9943

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)
=(460.625 / 1637.215) / (400.448 / 1514.846)
=0.28134668 / 0.26434898
=1.0643

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)
=((1203.361 + 162.481) / 1996.825) / ((719.71 + 146.197) / 1612.672)
=0.68400686 / 0.53693932
=1.2739

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
=(5.429 - -295.93 - -121.82) / 1996.825
=0.2119

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 -1.41 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 1.08930.149311.01766.41490.97041.04920.97511.01060.98031.065
GMI 1.04320.91251.10340.96730.92250.92740.87260.93051.05360.9861
AQI 1.01621.01983.27973.41190.96731.03420.98570.99621.02810.9318
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 0.8920.80851.68961.8240.91090.93890.85681.1261.08881.2355
TATA 0.24260.35920.30220.17120.08680.10410.24940.38960.31150.2454
M-score -1.12-1.518.983.91-2.20-1.93-1.28-0.34-0.79-1.30

Conn's Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 1.01061.08960.97670.88030.98030.91670.94521.05961.0651.1498
GMI 0.93470.97320.99791.03120.99010.97820.96930.95150.98610.996
AQI 0.99620.99970.9880.95051.02811.03931.00630.94680.93180.9378
SGI 1.381.39651.39031.31081.24411.18521.14521.11521.08621.0808
DEPI 1.69831.68761.55831.55311.0081.0110.96770.82781.02240.9943
SGAI 0.96030.94010.9180.88691.03311.0551.06971.12081.03821.0643
LVGI 1.1261.17031.15591.10051.08881.03031.0571.18061.23551.2739
TATA 0.38290.36090.38490.35070.31150.29950.27090.2210.24540.2119
M-score -0.33-0.34-0.33-0.63-0.85-1.00-1.18-1.44-1.31-1.41
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