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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 -2.66 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of DineEquity Inc was 8.74. The lowest was -2.91. And the median was -2.51.
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 * 1.0418||+||0.528 * 0.9162||+||0.404 * 0.9928||+||0.892 * 0.9291||+||0.115 * 0.9479|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9859||+||4.679 * -0.0212||-||0.327 * 1.009|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $91.2 Mil.|
Revenue was 160.521 + 167.201 + 157.901 + 161.283 = $646.9 Mil.
Gross Profit was 94.473 + 97.072 + 91.199 + 93.043 = $375.8 Mil.
Total Current Assets was $273.2 Mil.
Total Assets was $2,319.1 Mil.
Property, Plant and Equipment(Net PPE) was $261.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.2 Mil.
Selling, General & Admin. Expense(SGA) was $142.9 Mil.
Total Current Liabilities was $224.8 Mil.
Long-Term Debt was $1,355.0 Mil.
Net Income was 19.167 + 20.824 + 18.131 + 18.73 = $76.9 Mil.
Non Operating Income was -0.513 + -1.133 + -1.167 + 0.464 = $-2.3 Mil.
Cash Flow from Operations was 3.152 + 52.84 + 25.001 + 47.385 = $128.4 Mil.
|Accounts Receivable was $94.2 Mil.
Revenue was 158.114 + 163.169 + 158.637 + 216.318 = $696.2 Mil.
Gross Profit was 91.026 + 94.424 + 88.738 + 96.377 = $370.6 Mil.
Total Current Assets was $240.2 Mil.
Total Assets was $2,337.4 Mil.
Property, Plant and Equipment(Net PPE) was $285.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.2 Mil.
Selling, General & Admin. Expense(SGA) was $156.0 Mil.
Total Current Liabilities was $203.6 Mil.
Long-Term Debt was $1,374.6 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)|
|=||(91.187 / 646.906)||/||(94.2 / 696.238)|
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)|
|=||(97.072 / 696.238)||/||(94.473 / 646.906)|
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 - (273.193 + 261.201) / 2319.089)||/||(1 - (240.196 + 285.379) / 2337.442)|
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))|
|=||(36.218 / (36.218 + 285.379))||/||(35.217 / (35.217 + 261.201))|
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)|
|=||(142.914 / 646.906)||/||(156.017 / 696.238)|
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)|
|=||((1355.022 + 224.776) / 2319.089)||/||((1374.558 + 203.595) / 2337.442)|
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|
|=||(76.852 - -2.349||-||128.378)||/||2319.089|
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 -2.66 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