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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 Crown Crafts Inc was 8.82. The lowest was -8.85. And the median was -2.78.
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 Crown Crafts 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 * 0.9198||+||0.528 * 0.9542||+||0.404 * 0.9158||+||0.892 * 0.864||+||0.115 * 1.0158|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0488||+||4.679 * -0.1332||-||0.327 * 1.3069|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $14.45 Mil.|
Revenue was 17.262 + 15.809 + 15.599 + 25.077 = $73.75 Mil.
Gross Profit was 5.639 + 4.309 + 4.287 + 7.074 = $21.31 Mil.
Total Current Assets was $48.43 Mil.
Total Assets was $54.82 Mil.
Property, Plant and Equipment(Net PPE) was $0.47 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.97 Mil.
Selling, General & Admin. Expense(SGA) was $11.65 Mil.
Total Current Liabilities was $16.11 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 1.861 + 0.999 + 1.103 + 2.194 = $6.16 Mil.
Non Operating Income was -0.002 + -0.001 + 0.032 + -0.01 = $0.02 Mil.
Cash Flow from Operations was 5.043 + -1.389 + 8.298 + 1.489 = $13.44 Mil.
|Accounts Receivable was $18.19 Mil.
Revenue was 20.691 + 20.716 + 17.858 + 26.09 = $85.36 Mil.
Gross Profit was 6.252 + 5.706 + 4.781 + 6.794 = $23.53 Mil.
Total Current Assets was $46.96 Mil.
Total Assets was $53.80 Mil.
Property, Plant and Equipment(Net PPE) was $0.49 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.06 Mil.
Selling, General & Admin. Expense(SGA) was $12.86 Mil.
Total Current Liabilities was $12.10 Mil.
Long-Term Debt was $0.00 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)|
|=||(14.453 / 73.747)||/||(18.186 / 85.355)|
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)|
|=||(23.533 / 85.355)||/||(21.309 / 73.747)|
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 - (48.43 + 0.473) / 54.823)||/||(1 - (46.963 + 0.493) / 53.8)|
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))|
|=||(1.059 / (1.059 + 0.493))||/||(0.968 / (0.968 + 0.473))|
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)|
|=||(11.65 / 73.747)||/||(12.856 / 85.355)|
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)|
|=||((0 + 16.113) / 54.823)||/||((0 + 12.099) / 53.8)|
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|
|=||(6.157 - 0.019||-||13.441)||/||54.823|
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.
Crown Crafts Inc has a M-score of -3.46 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
Crown Crafts Inc Annual Data
Crown Crafts Inc Quarterly Data