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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.
DineEquity Inc has a M-score of -2.48 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of DineEquity Inc was -0.35. The lowest was -4.77. And the median was -2.55.
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 DineEquity 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 * 1.3355||+||0.528 * 0.852||+||0.404 * 0.994||+||0.892 * 0.8397||+||0.115 * 0.9838|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.086||+||4.679 * -0.014||-||0.327 * 1.0096|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $91.5 Mil.|
Revenue was 167.201 + 157.901 + 161.283 + 158.114 = $644.5 Mil.
Gross Profit was 97.072 + 91.199 + 93.043 + 91.026 = $372.3 Mil.
Total Current Assets was $298.9 Mil.
Total Assets was $2,355.2 Mil.
Property, Plant and Equipment(Net PPE) was $264.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.3 Mil.
Selling, General & Admin. Expense(SGA) was $143.7 Mil.
Total Current Liabilities was $245.8 Mil.
Long-Term Debt was $1,358.6 Mil.
Net Income was 20.824 + 18.131 + 18.73 + 16.937 = $74.6 Mil.
Non Operating Income was -1.133 + -1.167 + 0.464 + -0.08 = $-1.9 Mil.
Cash Flow from Operations was 52.84 + 25.001 + 47.385 + -15.797 = $109.4 Mil.
|Accounts Receivable was $81.6 Mil.
Revenue was 163.169 + 158.637 + 216.318 + 229.391 = $767.5 Mil.
Gross Profit was 94.424 + 88.738 + 96.377 + 98.254 = $377.8 Mil.
Total Current Assets was $268.5 Mil.
Total Assets was $2,377.7 Mil.
Property, Plant and Equipment(Net PPE) was $289.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.9 Mil.
Selling, General & Admin. Expense(SGA) was $157.6 Mil.
Total Current Liabilities was $226.3 Mil.
Long-Term Debt was $1,377.9 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)|
|=||(91.493 / 644.499)||/||(81.587 / 767.515)|
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)|
|=||(91.199 / 767.515)||/||(97.072 / 644.499)|
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 - (298.863 + 264.855) / 2355.247)||/||(1 - (268.477 + 289.723) / 2377.66)|
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))|
|=||(37.911 / (37.911 + 289.723))||/||(35.302 / (35.302 + 264.855))|
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)|
|=||(143.739 / 644.499)||/||(157.615 / 767.515)|
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)|
|=||((1358.628 + 245.774) / 2355.247)||/||((1377.914 + 226.349) / 2377.66)|
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|
|=||(74.622 - -1.916||-||109.429)||/||2355.247|
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.
DineEquity Inc has a M-score of -2.48 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
DineEquity Inc Annual Data
DineEquity Inc Quarterly Data