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Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-1.99 (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 -1.99 signals that the company is a manipulator.

DRI' s 10-Year Beneish M-Score Range
Min: -3.25   Max: -0.87
Current: -1.99

-3.25
-0.87

During the past 13 years, the highest Beneish M-Score of Darden Restaurants Inc was -0.87. The lowest was -3.25. 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 * 1.1053+0.528 * 0.9798+0.404 * 1.1792+0.892 * 1.0761+0.115 * 0.9145
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9403+4.679 * 0.0398-0.327 * 0.7667
=-1.99

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $47 Mil.
Revenue was 1878.3 + 1730.9 + 1559 + 1595.8 = $6,764 Mil.
Gross Profit was 431.4 + 388.6 + 289.3 + 313.2 = $1,423 Mil.
Total Current Assets was $1,056 Mil.
Total Assets was $5,995 Mil.
Property, Plant and Equipment(Net PPE) was $3,216 Mil.
Depreciation, Depletion and Amortization(DDA) was $319 Mil.
Selling, General & Admin. Expense(SGA) was $674 Mil.
Total Current Liabilities was $1,197 Mil.
Long-Term Debt was $1,452 Mil.
Net Income was 105.3 + 133.8 + -32.8 + 503.2 = $710 Mil.
Non Operating Income was 51 + -4.4 + -39.7 + -6.9 = $-0 Mil.
Cash Flow from Operations was 131.6 + 365.1 + -70.3 + 44.6 = $471 Mil.
Accounts Receivable was $40 Mil.
Revenue was 1650.1 + 1618.5 + 1485.6 + 1531.5 = $6,286 Mil.
Gross Profit was 334 + 352.7 + 285.1 + 323.4 = $1,295 Mil.
Total Current Assets was $1,976 Mil.
Total Assets was $7,083 Mil.
Property, Plant and Equipment(Net PPE) was $3,381 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $666 Mil.
Total Current Liabilities was $1,619 Mil.
Long-Term Debt was $2,463 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)
=(47.1 / 6764) / (39.6 / 6285.7)
=0.00696334 / 0.00630001
=1.1053

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)
=(388.6 / 6285.7) / (431.4 / 6764)
=0.20605501 / 0.21030455
=0.9798

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 - (1056.4 + 3215.8) / 5994.7) / (1 - (1975.8 + 3381) / 7082.7)
=0.28733715 / 0.24367826
=1.1792

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
=6764 / 6285.7
=1.0761

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))
=(304.4 / (304.4 + 3381)) / (319.3 / (319.3 + 3215.8))
=0.08259619 / 0.09032276
=0.9145

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)
=(673.5 / 6764) / (665.6 / 6285.7)
=0.09957126 / 0.10589115
=0.9403

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)
=((1452.3 + 1196.7) / 5994.7) / ((2463.4 + 1618.5) / 7082.7)
=0.44189034 / 0.57631977
=0.7667

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
=(709.5 - -1.7763568394E-15 - 471) / 5994.7
=0.0398

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 -1.99 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

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

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.16880.70382.03272.06921.95851.00280.91590.61840.61081.1053
GMI 1.01421.04161.10431.10531.10031.06911.04241.04481.01250.9798
AQI 1.21641.23541.20990.98460.98150.94921.12471.18791.15621.1792
SGI 1.04980.74020.66960.60140.51741.06161.17211.29941.51871.0761
DEPI 0.99261.3621.4811.60531.81350.72160.65630.57830.50950.9145
SGAI 1.02521.13151.09381.08981.15561.00250.98310.97860.88880.9403
LVGI 1.02321.03521.03560.97310.98291.00830.87970.83580.82520.7667
TATA -0.0677-0.0774-0.0765-0.0874-0.0819-0.06830.02080.04680.04960.0398
M-score -2.51-3.22-2.02-2.15-2.29-2.76-2.23-2.24-2.05-1.99
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