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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.
Dillards, Inc. has a M-score of -2.73 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Dillards, Inc. was 10.36. The lowest was -3.80. And the median was -2.75.
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 * 0.9872||+||0.528 * 1.0058||+||0.404 * 0.95||+||0.892 * 0.9911||+||0.115 * 0.9542|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9809||+||4.679 * -0.0443||-||0.327 * 1.0061|
|This Year (Jan14) TTM:||Last Year (Jan13) TTM:|
|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.
Net Income was 119.102 + 50.868 + 36.491 + 117.21 = $324 Mil.
Non Operating Income was 1.182 + 0.002 + 0.024 + 0 = $1 Mil.
Cash Flow from Operations was 328.755 + 41.282 + -5.158 + 136.878 = $502 Mil.
|Accounts Receivable was $32 Mil.
Revenue was 2154.056 + 1486.345 + 1525.182 + 1586.012 = $6,752 Mil.
Gross Profit was 771.286 + 566.722 + 537.38 + 629.099 = $2,504 Mil.
Total Current Assets was $1,492 Mil.
Total Assets was $4,049 Mil.
Property, Plant and Equipment(Net PPE) was $2,287 Mil.
Depreciation, Depletion and Amortization(DDA) was $262 Mil.
Selling, General & Admin. Expense(SGA) was $1,706 Mil.
Total Current Liabilities was $767 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)|
|=||(30.84 / 6691.777)||/||(31.519 / 6751.595)|
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)|
|=||(569.518 / 6751.595)||/||(706.974 / 6691.777)|
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 - (1660.156 + 2134.2) / 4050.739)||/||(1 - (1491.98 + 2287.015) / 4048.744)|
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))|
|=||(261.572 / (261.572 + 2287.015))||/||(257.237 / (257.237 + 2134.2))|
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)|
|=||(1658.869 / 6691.777)||/||(1706.364 / 6751.595)|
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)|
|=||((821.544 + 778.311) / 4050.739)||/||((822.309 + 767.116) / 4048.744)|
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|
|=||(323.671 - 1.208||-||501.757)||/||4050.739|
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 -2.73 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
Dillards, Inc. Annual Data
Dillards, Inc. Quarterly Data