Switch to:
Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-2.04 (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 -2.04 signals that the company is a manipulator.

DRI' s 10-Year Beneish M-Score Range
Min: -3.95   Max: 2.79
Current: -2.04

-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 -2.78.


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 * 0.6108+0.528 * 1.0125+0.404 * 1.1562+0.892 * 1.5187+0.115 * 0.5095
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8862+4.679 * 0.0526-0.327 * 0.8252
=-2.04

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

This Year (Feb15) TTM:Last Year (Feb14) TTM:
Accounts Receivable was $64 Mil.
Revenue was 1730.9 + 1559 + 1595.8 + 1650.1 = $6,536 Mil.
Gross Profit was 388.6 + 289.3 + 313.2 + 334 = $1,325 Mil.
Total Current Assets was $982 Mil.
Total Assets was $6,003 Mil.
Property, Plant and Equipment(Net PPE) was $3,289 Mil.
Depreciation, Depletion and Amortization(DDA) was $317 Mil.
Selling, General & Admin. Expense(SGA) was $654 Mil.
Total Current Liabilities was $1,351 Mil.
Long-Term Debt was $1,512 Mil.
Net Income was 133.8 + -32.8 + 503.2 + 86.5 = $691 Mil.
Non Operating Income was -4.4 + -39.7 + -6.9 + -17.1 = $-68 Mil.
Cash Flow from Operations was 365.1 + -70.3 + 44.6 + 103.4 = $443 Mil.
Accounts Receivable was $69 Mil.
Revenue was 1618.5 + 1485.6 + 1531.5 + -332 = $4,304 Mil.
Gross Profit was 352.7 + 285.1 + 323.4 + -77.8 = $883 Mil.
Total Current Assets was $909 Mil.
Total Assets was $7,225 Mil.
Property, Plant and Equipment(Net PPE) was $4,512 Mil.
Depreciation, Depletion and Amortization(DDA) was $212 Mil.
Selling, General & Admin. Expense(SGA) was $486 Mil.
Total Current Liabilities was $1,642 Mil.
Long-Term Debt was $2,534 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)
=(64 / 6535.8) / (69 / 4303.6)
=0.00979222 / 0.01603309
=0.6108

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)
=(289.3 / 4303.6) / (388.6 / 6535.8)
=0.20527001 / 0.20274488
=1.0125

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 - (981.9 + 3288.5) / 6002.9) / (1 - (909.2 + 4512.2) / 7224.8)
=0.2886105 / 0.24961245
=1.1562

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
=6535.8 / 4303.6
=1.5187

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))
=(211.5 / (211.5 + 4512.2)) / (316.8 / (316.8 + 3288.5))
=0.04477422 / 0.08787063
=0.5095

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)
=(653.8 / 6535.8) / (485.8 / 4303.6)
=0.10003366 / 0.11288224
=0.8862

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)
=((1511.8 + 1350.8) / 6002.9) / ((2533.6 + 1641.5) / 7224.8)
=0.47686951 / 0.57788451
=0.8252

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
=(690.7 - -68.1 - 442.8) / 6002.9
=0.0526

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 -2.04 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 1.00211.20241.25840.49011.62461.04421.02370.70380.99521.8444
GMI 0.95550.99761.04671.02520.95620.95391.04621.04161.06920.9797
AQI 1.01670.84594.82620.91540.96760.9640.96211.23540.95631.1704
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 1.0031.02041.00390.95231.04351.0290.94291.13130.99940.9433
LVGI 1.0641.0761.10070.9270.91440.99181.09761.03521.0230.7557
TATA -0.1113-0.1267-0.0755-0.0816-0.0931-0.0762-0.0481-0.0774-0.0656-0.0275
M-score -3.01-2.96-0.87-3.25-2.37-2.79-2.64-3.22-2.76-1.63

Darden Restaurants Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.16880.70382.03272.06921.95850.99520.91590.61840.61081.8444
GMI 1.01421.04161.10431.10531.10031.06911.04241.04481.01250.9798
AQI 1.21641.23541.20990.98460.98150.95631.12471.18791.15621.1704
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 1.02521.13151.09381.08981.15560.99970.98020.97580.88620.9375
LVGI 1.02321.03521.03560.97310.98291.0230.87970.83580.82520.7557
TATA -0.0677-0.0774-0.0765-0.0874-0.0819-0.06560.02380.04990.0526-0.019
M-score -2.51-3.22-2.02-2.15-2.29-2.76-2.22-2.22-2.04-1.59
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK