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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 4.27. The lowest was -3.83. And the median was -2.84.
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 * 2.4661||+||0.528 * 1.0059||+||0.404 * 1.0164||+||0.892 * 1.0233||+||0.115 * 0.9695|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0002||+||4.679 * -0.054||-||0.327 * 1.0631|
|This Year (Jul15) TTM:||Last Year (Jul14) TTM:|
|Accounts Receivable was $49 Mil.|
Revenue was 1550.844 + 1613.418 + 2179.556 + 1499.144 = $6,843 Mil.
Gross Profit was 530.513 + 652.999 + 746.887 + 574.701 = $2,505 Mil.
Total Current Assets was $1,749 Mil.
Total Assets was $4,002 Mil.
Property, Plant and Equipment(Net PPE) was $1,999 Mil.
Depreciation, Depletion and Amortization(DDA) was $250 Mil.
Selling, General & Admin. Expense(SGA) was $1,704 Mil.
Total Current Liabilities was $815 Mil.
Long-Term Debt was $823 Mil.
Net Income was 29.95 + 109.571 + 130.49 + 55.231 = $325 Mil.
Non Operating Income was 0.052 + 0.043 + -4.45 + 5.923 = $2 Mil.
Cash Flow from Operations was -29.299 + 91.273 + 401.687 + 76.066 = $540 Mil.
|Accounts Receivable was $19 Mil.
Revenue was 1512.888 + 1588.541 + 2078.675 + 1506.925 = $6,687 Mil.
Gross Profit was 536.619 + 649.317 + 706.974 + 569.518 = $2,462 Mil.
Total Current Assets was $1,734 Mil.
Total Assets was $4,070 Mil.
Property, Plant and Equipment(Net PPE) was $2,082 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $1,665 Mil.
Total Current Liabilities was $745 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)|
|=||(48.783 / 6842.962)||/||(19.331 / 6687.029)|
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)|
|=||(652.999 / 6687.029)||/||(530.513 / 6842.962)|
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 - (1748.986 + 1998.875) / 4002.331)||/||(1 - (1733.935 + 2081.577) / 4070.127)|
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))|
|=||(251.685 / (251.685 + 2081.577))||/||(250.24 / (250.24 + 1998.875))|
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)|
|=||(1704.365 / 6842.962)||/||(1665.137 / 6687.029)|
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)|
|=||((822.525 + 815.025) / 4002.331)||/||((821.133 + 745.361) / 4070.127)|
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|
|=||(325.242 - 1.568||-||539.727)||/||4002.331|
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 -1.38 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