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Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

DRI' s 10-Year Beneish M-Score Range
Min: -3.95   Max: 2.79
Current: -2.82

-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 -2.77.


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 * 0.9643+0.528 * 1.0859+0.404 * 0.9815+0.892 * 1.0507+0.115 * 0.9455
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0238+4.679 * -0.0821-0.327 * 0.9829
=-2.82

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

This Year (Feb14) TTM:Last Year (Feb13) TTM:
Accounts Receivable was $69 Mil.
Revenue was 2233.1 + 2049.9 + 2158.5 + 2298.9 = $8,740 Mil.
Gross Profit was 472.2 + 379.8 + 457.2 + 508.7 = $1,818 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 $424 Mil.
Selling, General & Admin. Expense(SGA) was $874 Mil.
Total Current Liabilities was $1,642 Mil.
Long-Term Debt was $2,534 Mil.
Net Income was 109.7 + 19.8 + 70.2 + 133.1 = $333 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 363.7 + 86 + 217 + 259.6 = $926 Mil.
Accounts Receivable was $68 Mil.
Revenue was 2258.2 + 1960 + 2034.8 + 2065.5 = $8,319 Mil.
Gross Profit was 505.9 + 391.3 + 485 + 496.6 = $1,879 Mil.
Total Current Assets was $853 Mil.
Total Assets was $6,958 Mil.
Property, Plant and Equipment(Net PPE) was $4,335 Mil.
Depreciation, Depletion and Amortization(DDA) was $383 Mil.
Selling, General & Admin. Expense(SGA) was $813 Mil.
Total Current Liabilities was $1,535 Mil.
Long-Term Debt was $2,555 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)
=(69 / 8740.4) / (68.1 / 8318.5)
=0.00789438 / 0.00818657
=0.9643

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)
=(379.8 / 8318.5) / (472.2 / 8740.4)
=0.22585803 / 0.20798819
=1.0859

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 - (909.2 + 4512.2) / 7224.8) / (1 - (853.4 + 4335) / 6957.8)
=0.24961245 / 0.25430452
=0.9815

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
=8740.4 / 8318.5
=1.0507

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))
=(383.1 / (383.1 + 4335)) / (423.9 / (423.9 + 4512.2))
=0.08119794 / 0.08587751
=0.9455

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)
=(874.1 / 8740.4) / (812.6 / 8318.5)
=0.10000686 / 0.09768588
=1.0238

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)
=((2533.6 + 1641.5) / 7224.8) / ((2555.4 + 1535.4) / 6957.8)
=0.57788451 / 0.58794447
=0.9829

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
=(332.8 - 0 - 926.3) / 7224.8
=-0.0821

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 -2.82 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

May04May05May06May07May08May09May10May11May12May13
DSRI 0.971.14381.00211.20241.25840.49011.62461.04421.02371.1187
GMI 0.98370.98190.95550.99761.04671.02520.95620.95391.04621.0378
AQI 0.96660.92381.01670.84594.82620.91540.96760.9640.96211.2354
SGI 1.07481.05491.01431.03991.19031.08920.98551.05441.06651.0692
DEPI 0.95411.01261.15190.89251.14140.94080.97091.00990.99080.9841
SGAI 1.01740.99891.0031.02041.00390.95231.04351.0290.94291.0618
LVGI 0.98710.98751.0641.0761.10070.9270.91440.99181.09761.0352
TATA -0.0916-0.0849-0.1113-0.1267-0.0755-0.0816-0.0931-0.0762-0.0481-0.0775
M-score -2.90-2.73-3.01-2.96-0.87-3.25-2.37-2.79-2.64-2.58

Darden Restaurants Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
DSRI 1.27140.71431.02370.86450.82861.16881.11871.26941.16690.9643
GMI 1.02091.04351.04621.00910.99271.01421.03781.08471.09731.0859
AQI 0.94110.97370.96210.99681.22061.21641.23541.20990.98460.9815
SGI 1.06461.07461.06651.05971.06191.04981.06921.07221.06641.0507
DEPI 1.00290.99930.99080.99011.00980.99260.98410.97290.94010.9455
SGAI 1.00280.96310.9430.99141.01561.02521.06191.025111.0238
LVGI 1.11031.1131.09761.07431.04341.02321.03521.03560.97310.9829
TATA -0.0414-0.054-0.0481-0.0693-0.0716-0.0677-0.0775-0.0767-0.0877-0.0821
M-score -2.42-2.95-2.64-2.90-2.85-2.51-2.58-2.42-2.63-2.82
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