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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 CSS Industries Inc was -1.33. The lowest was -3.73. And the median was -2.76.
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 CSS Industries 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 * 0.9777||+||0.528 * 0.9977||+||0.404 * 1.1164||+||0.892 * 0.9974||+||0.115 * 0.952|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0246||+||4.679 * -0.0334||-||0.327 * 0.9657|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $95.1 Mil.|
Revenue was 111.477 + 44.228 + 53.702 + 104.993 = $314.4 Mil.
Gross Profit was 37.791 + 12.442 + 15.383 + 36.323 = $101.9 Mil.
Total Current Assets was $242.3 Mil.
Total Assets was $321.4 Mil.
Property, Plant and Equipment(Net PPE) was $25.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.1 Mil.
Selling, General & Admin. Expense(SGA) was $75.8 Mil.
Total Current Liabilities was $51.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 11.229 + -3.068 + -1.336 + 9.768 = $16.6 Mil.
Non Operating Income was -0.048 + 0.048 + -0.035 + -0.036 = $-0.1 Mil.
Cash Flow from Operations was -19.729 + -17.632 + 30.885 + 33.873 = $27.4 Mil.
|Accounts Receivable was $97.5 Mil.
Revenue was 106.092 + 48.257 + 54.56 + 106.295 = $315.2 Mil.
Gross Profit was 35.397 + 14.599 + 15.704 + 36.266 = $102.0 Mil.
Total Current Assets was $247.9 Mil.
Total Assets was $321.6 Mil.
Property, Plant and Equipment(Net PPE) was $25.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.6 Mil.
Selling, General & Admin. Expense(SGA) was $74.2 Mil.
Total Current Liabilities was $53.1 Mil.
Long-Term Debt was $0.0 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)|
|=||(95.08 / 314.4)||/||(97.502 / 315.204)|
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)|
|=||(12.442 / 315.204)||/||(37.791 / 314.4)|
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 - (242.258 + 25.769) / 321.427)||/||(1 - (247.917 + 25.854) / 321.633)|
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))|
|=||(7.587 / (7.587 + 25.854))||/||(8.063 / (8.063 + 25.769))|
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)|
|=||(75.81 / 314.4)||/||(74.177 / 315.204)|
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 + 51.267) / 321.427)||/||((0 + 53.123) / 321.633)|
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|
|=||(16.593 - -0.071||-||27.397)||/||321.427|
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.
CSS Industries Inc has a M-score of -2.61 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
CSS Industries Inc Annual Data
CSS Industries Inc Quarterly Data