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Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-2.64 (As of Today)

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.

Darden Restaurants Inc has a M-score of -2.64 suggests that the company is not a manipulator.

DRI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.95   Max: 2.79
Current: -2.64

-3.95
2.79

During the past 13 years, the highest Beneish M-Score of Darden Restaurants Inc was 2.79. The lowest was -3.95. And the median was -2.76.


Definition

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 Darden Restaurants 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 * 0.8828+0.528 * 0.911+0.404 * 1.113+0.892 * 1.075+0.115 * 0.6479
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.889+4.679 * -0.0273-0.327 * 0.8914
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $63 Mil.
Revenue was 1608.8 + 1687 + 1878.3 + 1730.9 = $6,905 Mil.
Gross Profit was 324.9 + 376.3 + 431.4 + 388.6 = $1,521 Mil.
Total Current Assets was $1,384 Mil.
Total Assets was $5,182 Mil.
Property, Plant and Equipment(Net PPE) was $2,075 Mil.
Depreciation, Depletion and Amortization(DDA) was $317 Mil.
Selling, General & Admin. Expense(SGA) was $646 Mil.
Total Current Liabilities was $1,815 Mil.
Long-Term Debt was $440 Mil.
Net Income was 43.2 + 86.4 + 105.3 + 133.8 = $369 Mil.
Non Operating Income was 0 + 0 + 51 + -4.4 = $47 Mil.
Cash Flow from Operations was 52.6 + 138 + -85 + 358.1 = $464 Mil.
Accounts Receivable was $67 Mil.
Revenue was 1559 + 1595.8 + 1650.1 + 1618.5 = $6,423 Mil.
Gross Profit was 289.3 + 313.2 + 334 + 352.7 = $1,289 Mil.
Total Current Assets was $719 Mil.
Total Assets was $5,788 Mil.
Property, Plant and Equipment(Net PPE) was $3,338 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $676 Mil.
Total Current Liabilities was $1,306 Mil.
Long-Term Debt was $1,519 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(63.3 / 6905) / (66.7 / 6423.4)
=0.00916727 / 0.01038391
=0.8828

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(376.3 / 6423.4) / (324.9 / 6905)
=0.20070368 / 0.22030413
=0.911

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1383.5 + 2074.6) / 5182.3) / (1 - (719.4 + 3338.3) / 5787.9)
=0.33270941 / 0.29893398
=1.113

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=6905 / 6423.4
=1.075

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))
=(313.5 / (313.5 + 3338.3)) / (316.9 / (316.9 + 2074.6))
=0.08584807 / 0.13251098
=0.6479

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)
=(646 / 6905) / (676 / 6423.4)
=0.09355539 / 0.10524022
=0.889

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)
=((439.5 + 1815.4) / 5182.3) / ((1519.2 + 1306) / 5787.9)
=0.43511568 / 0.48812177
=0.8914

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(368.7 - 46.6 - 463.7) / 5182.3
=-0.0273

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.

Darden Restaurants Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Darden Restaurants Inc Annual Data

May06May07May08May09May10May11May12May13May14May15
DSRI 1.00211.20241.25840.49011.62461.04421.02370.70381.00281.1053
GMI 0.95550.99761.04671.02520.95620.95391.04621.04161.06920.9797
AQI 1.01670.84594.82620.91540.96760.9640.96211.23540.94921.1792
SGI 1.01431.03991.19031.08920.98551.05441.06650.74021.06161.0761
DEPI 1.15190.89251.14140.94080.97091.00990.99081.3620.72160.9145
SGAI 1.0031.02041.00390.95231.04351.0290.94291.13131.00220.9406
LVGI 1.0641.0761.10070.9270.91440.99181.09761.03521.00830.7667
TATA -0.1113-0.1267-0.0755-0.0816-0.0931-0.0762-0.0481-0.0774-0.06830.0398
M-score -3.01-2.96-0.87-3.25-2.37-2.79-2.64-3.22-2.76-1.99

Darden Restaurants Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 2.03272.06921.95851.00280.91590.61840.61081.10530.65340.8828
GMI 1.10431.10531.10031.06911.04241.04481.01250.97980.93380.911
AQI 1.20990.98460.98150.94921.12471.18791.15621.17921.00311.113
SGI 0.66960.60140.51741.06161.17211.29941.51871.07611.07961.075
DEPI 1.4811.60531.81350.72160.65630.57830.50950.91450.89180.6479
SGAI 1.09381.08981.15561.00250.98290.9790.88920.94070.94970.889
LVGI 1.03560.97310.98291.00830.87970.83580.82520.76670.83990.8914
TATA -0.0765-0.0755-0.0597-0.06830.0144-0.0146-0.0210.032-0.0474-0.0273
M-score -2.02-2.09-2.19-2.76-2.26-2.52-2.38-2.03-2.93-2.64
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