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Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-1.97 (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 -1.96 signals that the company is a manipulator.

DRI' s 10-Year Beneish M-Score Range
Min: -3.95   Max: 2.67
Current: -1.97

-3.95
2.67

During the past 13 years, the highest Beneish M-Score of Darden Restaurants Inc was 2.67. The lowest was -3.95. And the median was -2.79.


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 * 1.6273+0.528 * 1.0677+0.404 * 1.1247+0.892 * 0.6597+0.115 * 1.1032
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0465+4.679 * 0.024-0.327 * 0.8797
=-1.96

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $86 Mil.
Revenue was 1595.8 + -155.9 + 2233.1 + 2049.9 = $5,723 Mil.
Gross Profit was 313.2 + -14.1 + 472.2 + 379.8 = $1,151 Mil.
Total Current Assets was $1,004 Mil.
Total Assets was $6,124 Mil.
Property, Plant and Equipment(Net PPE) was $3,380 Mil.
Depreciation, Depletion and Amortization(DDA) was $277 Mil.
Selling, General & Admin. Expense(SGA) was $593 Mil.
Total Current Liabilities was $1,602 Mil.
Long-Term Debt was $1,520 Mil.
Net Income was 503.2 + 86.5 + 109.7 + 19.8 = $719 Mil.
Non Operating Income was -6.9 + -18.3 + 0 + 0 = $-25 Mil.
Cash Flow from Operations was 44.6 + 103.4 + 363.7 + 86 = $598 Mil.
Accounts Receivable was $80 Mil.
Revenue was 2158.5 + 2298.9 + 2258.2 + 1960 = $8,676 Mil.
Gross Profit was 457.2 + 508.7 + 505.9 + 391.3 = $1,863 Mil.
Total Current Assets was $810 Mil.
Total Assets was $7,064 Mil.
Property, Plant and Equipment(Net PPE) was $4,470 Mil.
Depreciation, Depletion and Amortization(DDA) was $408 Mil.
Selling, General & Admin. Expense(SGA) was $860 Mil.
Total Current Liabilities was $1,563 Mil.
Long-Term Debt was $2,530 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)
=(86.2 / 5722.9) / (80.3 / 8675.6)
=0.01506229 / 0.00925584
=1.6273

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)
=(-14.1 / 8675.6) / (313.2 / 5722.9)
=0.21475172 / 0.20113928
=1.0677

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 - (1003.9 + 3380) / 6124.1) / (1 - (809.7 + 4469.6) / 7064)
=0.28415604 / 0.25264723
=1.1247

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
=5722.9 / 8675.6
=0.6597

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))
=(408 / (408 + 4469.6)) / (277.3 / (277.3 + 3380))
=0.0836477 / 0.07582096
=1.1032

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)
=(593.4 / 5722.9) / (859.6 / 8675.6)
=0.10368869 / 0.09908248
=1.0465

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)
=((1519.9 + 1601.8) / 6124.1) / ((2530.1 + 1563.1) / 7064)
=0.50974021 / 0.57944507
=0.8797

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
=(719.2 - -25.2 - 597.7) / 6124.1
=0.024

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 -1.96 signals that the company is likely to 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

May05May06May07May08May09May10May11May12May13May14
DSRI 1.14380.93781.28481.25840.49011.4551.16591.02371.11870.6261
GMI 0.98830.99090.96191.04671.02520.95620.95391.04621.03781.0731
AQI 0.92381.01670.84594.82620.91540.95890.97280.96211.23540.9563
SGI 1.05491.08380.97321.19031.08920.98551.05441.06651.06920.735
DEPI 1.01261.00081.02741.13160.94890.97091.00990.99080.98410.9987
SGAI 0.99890.99481.02421.00840.95231.04351.02250.94891.06181.0648
LVGI 0.98751.0641.0761.10070.9270.93480.97021.09761.03521.023
TATA -0.0849-0.1116-0.1398-0.0574-0.0816-0.0948-0.0753-0.0482-0.0775-0.0656
M-score -2.73-3.00-3.00-0.79-3.25-2.55-2.66-2.64-2.58-3.37

Darden Restaurants Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.02370.86450.82861.16881.11871.26941.16690.96430.62611.6273
GMI 1.04621.00910.99271.01421.03781.08471.09731.08591.07311.0677
AQI 0.96210.99681.22061.21641.23541.20990.98460.98150.95631.1247
SGI 1.06651.05971.06191.04981.06921.07221.06641.05070.7350.6597
DEPI 0.99080.99330.98120.99260.98410.97140.96970.94550.99871.1032
SGAI 0.9490.99771.0221.03161.06191.025111.02381.06461.0465
LVGI 1.09761.07431.04341.02321.03521.03560.97310.98291.0230.8797
TATA -0.0482-0.0693-0.0717-0.0678-0.0775-0.0767-0.0877-0.0821-0.06560.024
M-score -2.64-2.90-2.85-2.52-2.58-2.42-2.63-2.82-3.37-1.96
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