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GuruFocus has detected 1 Warning Sign with Crown Crafts Inc $CRWS.
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Crown Crafts Inc (NAS:CRWS)
Beneish M-Score
-3.46 (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.

Crown Crafts Inc has a M-score of -3.46 suggests that the company is not a manipulator.

CRWS' s Beneish M-Score Range Over the Past 10 Years
Min: -8.85   Max: 8.82
Current: -3.46

-8.85
8.82

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 -2.77.


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 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
=-3.46

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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

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)
=(14.453 / 73.747) / (18.186 / 85.355)
=0.19598085 / 0.21306309
=0.9198

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)
=(23.533 / 85.355) / (21.309 / 73.747)
=0.27570734 / 0.28894735
=0.9542

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 - (48.43 + 0.473) / 54.823) / (1 - (46.963 + 0.493) / 53.8)
=0.10798388 / 0.11791822
=0.9158

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
=73.747 / 85.355
=0.864

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))
=0.68234536 / 0.67175573
=1.0158

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)
=0.15797253 / 0.15061801
=1.0488

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)
=0.29390949 / 0.22488848
=1.3069

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
=(6.157 - 0.019 - 13.441) / 54.823
=-0.1332

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.


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 local exchange's currency.

Crown Crafts Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.95221.3141.00990.96550.99011.14911.16290.96410.97420.9477
GMI 0.93581.0121.14830.92051.05260.97470.90880.90941.0120.9701
AQI 1.06390.85120.31571.73850.96180.9330.91420.88120.84440.8633
SGI 0.99121.04031.16710.98481.04540.94810.91921.03671.05760.981
DEPI 0.96710.37320.87640.97681.01351.05271.2530.89360.96530.9392
SGAI 1.02691.00570.87741.06321.03920.9661.11291.08711.02990.9266
LVGI 0.4621.94791.330.55620.93250.71131.15420.8670.93211.1192
TATA -0.16820.0211-0.4523-0.13650.0502-0.0727-0.08960.04620.0199-0.0788
M-score -3.16-2.49-4.74-2.78-2.18-2.66-2.95-2.34-2.40-3.02

Crown Crafts Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.07181.21850.97421.003313.32070.81880.94770.90341.01640.9198
GMI 0.96991.00151.0121.01761.02730.99930.97010.96050.95210.9542
AQI 0.82250.85140.84440.8280.87750.89190.86331.01110.96420.9158
SGI 1.00541.03711.05761.09641.09451.01740.9810.93140.8730.864
DEPI 0.9520.99560.96530.98060.98140.94810.93920.99010.99941.0158
SGAI 1.05651.01871.02991.0010.86440.90040.92660.93781.07751.0488
LVGI 1.12040.94570.93210.94780.77240.7931.11920.82720.76061.3069
TATA 0.02940.1010.01990.0001-0.0394-0.0905-0.0788-0.089-0.0853-0.1332
M-score -3.33-1.82-2.40-2.448.82-3.02-3.02-3.00-2.95-3.46
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