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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 Dillards Inc was 3.73. The lowest was -3.61. And the median was -2.73.
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 * 1.8085||+||0.528 * 0.9973||+||0.404 * 0.9565||+||0.892 * 1.0132||+||0.115 * 0.9726|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.006||+||4.679 * -0.0675||-||0.327 * 1.0358|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jan15) TTM:||Last Year (Jan14) TTM:|
|Accounts Receivable was $57 Mil.|
Revenue was 2179.556 + 1499.144 + 1512.888 + 1588.541 = $6,780 Mil.
Gross Profit was 746.887 + 574.701 + 536.619 + 649.317 = $2,508 Mil.
Total Current Assets was $1,888 Mil.
Total Assets was $4,170 Mil.
Property, Plant and Equipment(Net PPE) was $2,029 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $1,691 Mil.
Total Current Liabilities was $885 Mil.
Long-Term Debt was $821 Mil.
Net Income was 130.49 + 55.231 + 34.449 + 111.683 = $332 Mil.
Non Operating Income was -4.45 + 5.923 + 0.05 + 0.389 = $2 Mil.
Cash Flow from Operations was 401.687 + 76.066 + -28.023 + 161.859 = $612 Mil.
|Accounts Receivable was $31 Mil.
Revenue was 2078.675 + 1506.925 + 1516.796 + 1589.381 = $6,692 Mil.
Gross Profit was 706.974 + 569.518 + 539.974 + 651.596 = $2,468 Mil.
Total Current Assets was $1,660 Mil.
Total Assets was $4,051 Mil.
Property, Plant and Equipment(Net PPE) was $2,134 Mil.
Depreciation, Depletion and Amortization(DDA) was $257 Mil.
Selling, General & Admin. Expense(SGA) was $1,659 Mil.
Total Current Liabilities was $778 Mil.
Long-Term Debt was $822 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)|
|=||(56.51 / 6780.129)||/||(30.84 / 6691.777)|
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)|
|=||(574.701 / 6691.777)||/||(746.887 / 6780.129)|
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 - (1888.442 + 2029.171) / 4170.071)||/||(1 - (1660.156 + 2134.2) / 4050.739)|
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))|
|=||(257.237 / (257.237 + 2134.2))||/||(252.334 / (252.334 + 2029.171))|
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)|
|=||(1690.836 / 6780.129)||/||(1658.869 / 6691.777)|
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)|
|=||((820.704 + 885.323) / 4170.071)||/||((821.544 + 778.311) / 4050.739)|
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|
|=||(331.853 - 1.912||-||611.589)||/||4170.071|
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 -2.08 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