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Beneish M-Score -0.92 higher than -2.22, which implies that it might have manipulated its financial results.
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 Dillards Inc was 4.27. The lowest was -3.83. And the median was -2.85.
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 Dillards 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 * 2.9491||+||0.528 * 0.9987||+||0.404 * 0.9631||+||0.892 * 1.017||+||0.115 * 0.9714|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0058||+||4.679 * -0.0476||-||0.327 * 1.0147|
|This Year (Apr15) TTM:||Last Year (Apr14) TTM:|
|Accounts Receivable was $58 Mil.|
Revenue was 1613.418 + 2179.556 + 1499.144 + 1512.888 = $6,805 Mil.
Gross Profit was 652.999 + 746.887 + 574.701 + 536.619 = $2,511 Mil.
Total Current Assets was $2,207 Mil.
Total Assets was $4,473 Mil.
Property, Plant and Equipment(Net PPE) was $2,010 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $1,701 Mil.
Total Current Liabilities was $1,095 Mil.
Long-Term Debt was $820 Mil.
Net Income was 109.571 + 130.49 + 55.231 + 34.449 = $330 Mil.
Non Operating Income was 0.043 + -4.45 + 5.923 + 0.05 = $2 Mil.
Cash Flow from Operations was 91.273 + 401.687 + 76.066 + -28.023 = $541 Mil.
|Accounts Receivable was $19 Mil.
Revenue was 1588.541 + 2078.675 + 1506.925 + 1516.796 = $6,691 Mil.
Gross Profit was 649.317 + 706.974 + 569.518 + 539.974 = $2,466 Mil.
Total Current Assets was $1,943 Mil.
Total Assets was $4,294 Mil.
Property, Plant and Equipment(Net PPE) was $2,096 Mil.
Depreciation, Depletion and Amortization(DDA) was $254 Mil.
Selling, General & Admin. Expense(SGA) was $1,663 Mil.
Total Current Liabilities was $991 Mil.
Long-Term Debt was $821 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)|
|=||(57.522 / 6805.006)||/||(19.178 / 6690.937)|
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)|
|=||(746.887 / 6690.937)||/||(652.999 / 6805.006)|
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 - (2206.941 + 2010.281) / 4472.958)||/||(1 - (1942.727 + 2096.01) / 4293.622)|
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))|
|=||(253.973 / (253.973 + 2096.01))||/||(251.647 / (251.647 + 2010.281))|
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)|
|=||(1700.687 / 6805.006)||/||(1662.568 / 6690.937)|
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)|
|=||((820.481 + 1095.38) / 4472.958)||/||((821.341 + 990.998) / 4293.622)|
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|
|=||(329.741 - 1.566||-||541.003)||/||4472.958|
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.
Dillards Inc has a M-score of -0.92 signals that the company is likely to 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
Dillards Inc Annual Data
Dillards Inc Quarterly Data