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GuruFocus has detected 2 Warning Signs with CSS Industries Inc $CSS.
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CSS Industries Inc (NYSE:CSS)
Beneish M-Score
-1.74 (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.

CSS Industries Inc has a M-score of -1.74 signals that the company is a manipulator.

CSS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.75   Max: -0.6
Current: -1.74

-3.75
-0.6

During the past 13 years, the highest Beneish M-Score of CSS Industries Inc was -0.60. The lowest was -3.75. And the median was -2.67.


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 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 * 1.3212+0.528 * 1.053+0.404 * 1.2357+0.892 * 1.0208+0.115 * 1.2299
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0452+4.679 * 0.0598-0.327 * 0.9799
=-1.74

* 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 $106.5 Mil.
Revenue was 117.153 + 101.291 + 45.318 + 56.744 = $320.5 Mil.
Gross Profit was 36.978 + 31.6 + 12.297 + 16.85 = $97.7 Mil.
Total Current Assets was $253.0 Mil.
Total Assets was $361.4 Mil.
Property, Plant and Equipment(Net PPE) was $36.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.5 Mil.
Selling, General & Admin. Expense(SGA) was $79.7 Mil.
Total Current Liabilities was $48.7 Mil.
Long-Term Debt was $0.5 Mil.
Net Income was 29.969 + 6.992 + -3.286 + -0.589 = $33.1 Mil.
Non Operating Income was 19.821 + 0.387 + 0.091 + 0.296 = $20.6 Mil.
Cash Flow from Operations was 16.424 + -21.232 + -20.794 + 16.496 = $-9.1 Mil.
Accounts Receivable was $79.0 Mil.
Revenue was 104.568 + 111.477 + 44.228 + 53.702 = $314.0 Mil.
Gross Profit was 35.188 + 37.791 + 12.442 + 15.383 = $100.8 Mil.
Total Current Assets was $245.2 Mil.
Total Assets was $324.4 Mil.
Property, Plant and Equipment(Net PPE) was $26.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.2 Mil.
Selling, General & Admin. Expense(SGA) was $74.7 Mil.
Total Current Liabilities was $45.1 Mil.
Long-Term Debt was $0.0 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)
=(106.514 / 320.506) / (78.978 / 313.975)
=0.33233075 / 0.25154232
=1.3212

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)
=(100.804 / 313.975) / (97.725 / 320.506)
=0.32105741 / 0.30490849
=1.053

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 - (253.002 + 35.998) / 361.361) / (1 - (245.195 + 26.592) / 324.35)
=0.20024574 / 0.16205642
=1.2357

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
=320.506 / 313.975
=1.0208

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))
=(8.172 / (8.172 + 26.592)) / (8.506 / (8.506 + 35.998))
=0.23507076 / 0.19112889
=1.2299

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)
=(79.671 / 320.506) / (74.675 / 313.975)
=0.24857881 / 0.23783741
=1.0452

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)
=((0.516 + 48.735) / 361.361) / ((0 + 45.112) / 324.35)
=0.13629307 / 0.13908432
=0.9799

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
=(33.086 - 20.595 - -9.106) / 361.361
=0.0598

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 -1.74 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 local exchange's currency.

CSS Industries Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.03441.12171.15411.12421.08971.05381.01181.16570.9731.0601
GMI 0.93040.93271.05441.06160.82581.03080.96730.93050.99081.0071
AQI 0.98472.35521.12160.67791.04190.88330.91630.91221.18851.2231
SGI 1.00990.93890.96820.92960.85551.00260.94680.87990.97691.0127
DEPI 0.86770.94561.0690.93040.92751.06680.98470.980.92331.0048
SGAI 1.05471.07151.0331.0641.05320.99160.99361.06011.02181.0004
LVGI 0.8010.96470.78650.93441.00310.85440.90450.8811.04950.9643
TATA -0.0943-0.0493-0.0418-0.2637-0.0868-0.0342-0.0303-0.0307-0.05180.0058
M-score -2.88-2.15-2.41-3.76-3.03-2.56-2.68-2.62-2.73-2.28

CSS Industries Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.00910.96960.9730.88550.97770.93211.06011.13260.98341.3212
GMI 0.960.97160.99080.99710.99771.01231.00711.00341.04071.053
AQI 0.92170.95091.18851.17241.11641.10191.22311.20891.29251.2357
SGI 0.95740.98240.97690.96090.99741.00021.01271.02940.97941.0208
DEPI 0.94090.93140.92330.9230.9520.97861.00481.00251.00321.2299
SGAI 1.00791.0071.02181.04971.02460.991.00040.98061.0391.0452
LVGI 0.96960.89361.04950.97640.96570.96460.96430.96620.94160.9799
TATA -0.0524-0.0514-0.0518-0.0452-0.0334-0.04010.00580.01550.00470.0598
M-score -2.81-2.77-2.73-2.77-2.61-2.67-2.28-2.16-2.34-1.74
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