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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 -2.85.
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 * 1.3311||+||0.528 * 1.0129||+||0.404 * 1.0007||+||0.892 * 0.987||+||0.115 * 1.0005|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9999||+||4.679 * -0.0518||-||0.327 * 0.9825|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $42 Mil.|
Revenue was 1499.144 + 1512.888 + 1588.541 + 2078.675 = $6,679 Mil.
Gross Profit was 574.701 + 536.619 + 649.317 + 706.974 = $2,468 Mil.
Total Current Assets was $2,041 Mil.
Total Assets was $4,357 Mil.
Property, Plant and Equipment(Net PPE) was $2,064 Mil.
Depreciation, Depletion and Amortization(DDA) was $249 Mil.
Selling, General & Admin. Expense(SGA) was $1,673 Mil.
Total Current Liabilities was $1,214 Mil.
Long-Term Debt was $821 Mil.
Net Income was 55.231 + 34.449 + 111.683 + 119.102 = $320 Mil.
Non Operating Income was 5.923 + 0.05 + 0.389 + 1.182 = $8 Mil.
Cash Flow from Operations was 76.066 + -28.023 + 161.859 + 328.755 = $539 Mil.
|Accounts Receivable was $32 Mil.
Revenue was 1506.925 + 1516.796 + 1589.381 + 2154.056 = $6,767 Mil.
Gross Profit was 569.518 + 539.974 + 651.596 + 771.286 = $2,532 Mil.
Total Current Assets was $2,038 Mil.
Total Assets was $4,460 Mil.
Property, Plant and Equipment(Net PPE) was $2,165 Mil.
Depreciation, Depletion and Amortization(DDA) was $262 Mil.
Selling, General & Admin. Expense(SGA) was $1,695 Mil.
Total Current Liabilities was $1,298 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)|
|=||(41.661 / 6679.248)||/||(31.71 / 6767.158)|
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)|
|=||(536.619 / 6767.158)||/||(574.701 / 6679.248)|
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 - (2040.709 + 2064.303) / 4357.068)||/||(1 - (2037.544 + 2164.545) / 4459.915)|
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))|
|=||(261.747 / (261.747 + 2164.545))||/||(249.48 / (249.48 + 2064.303))|
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)|
|=||(1672.824 / 6679.248)||/||(1695.04 / 6767.158)|
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)|
|=||((820.921 + 1214.128) / 4357.068)||/||((821.742 + 1298.445) / 4459.915)|
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|
|=||(320.465 - 7.544||-||538.657)||/||4357.068|
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 -2.42 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