Switch to:
Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-2.22 (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 -2.22 suggests that the company is not a manipulator.

DRI' s 10-Year Beneish M-Score Range
Min: -3.95   Max: 2.79
Current: -2.22

-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 * 1.0162+0.528 * 1.0487+0.404 * 1.1247+0.892 * 1.0563+0.115 * 0.6563
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9807+4.679 * 0.024-0.327 * 0.8797
=-2.22

* 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 $309 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 1531.5 + -332 + 2258.2 + 1960 = $5,418 Mil.
Gross Profit was 323.4 + -77.8 + 505.9 + 391.3 = $1,143 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 $260 Mil.
Selling, General & Admin. Expense(SGA) was $573 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 / 5417.7)
=0.01506229 / 0.01482179
=1.0162

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 / 5417.7) / (313.2 / 5722.9)
=0.21093822 / 0.20113928
=1.0487

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 / 5417.7
=1.0563

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))
=(259.9 / (259.9 + 4469.6)) / (308.9 / (308.9 + 3380))
=0.05495295 / 0.0837377
=0.6563

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) / (572.8 / 5417.7)
=0.10368869 / 0.10572752
=0.9807

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 -2.22 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

May05May06May07May08May09May10May11May12May13May14
DSRI 1.14381.00211.20241.25840.49011.62461.04421.02370.70380.9952
GMI 0.98190.95550.99761.04671.02520.95620.95391.04621.04161.0692
AQI 0.92381.01670.84594.82620.91540.96760.9640.96211.23540.9563
SGI 1.05491.01431.03991.19031.08920.98551.05441.06650.74021.0616
DEPI 1.01261.15190.89251.14140.94080.97091.00990.99081.3620.7216
SGAI 0.99891.0031.02041.00390.95231.04351.0290.94291.13130.9994
LVGI 0.98751.0641.0761.10070.9270.91440.99181.09761.03521.023
TATA -0.0849-0.1113-0.1267-0.0755-0.0816-0.0931-0.0762-0.0481-0.0774-0.0656
M-score -2.73-3.01-2.96-0.87-3.25-2.37-2.79-2.64-3.22-2.76

Darden Restaurants Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.02370.86450.82861.16880.70382.03271.85721.53731.10541.0162
GMI 1.04621.00910.99271.01421.04161.10431.12841.12821.07341.0487
AQI 0.96210.99681.22061.21641.23541.20990.98460.98150.95631.1247
SGI 1.06651.05971.06191.04980.74020.66960.670.65910.95571.0563
DEPI 0.99080.99011.00980.99261.3621.4811.27461.27310.72160.6563
SGAI 0.9430.99141.01561.02521.13151.09381.06361.09661.00220.9807
LVGI 1.09761.07431.04341.02321.03521.03560.97310.98291.0230.8797
TATA -0.0481-0.0693-0.0716-0.0677-0.0774-0.0765-0.0874-0.0819-0.06540.024
M-score -2.64-2.90-2.85-2.51-3.22-2.02-2.30-2.59-2.75-2.22
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)
Free 7-day Trial
FEEDBACK