Switch to:
Darden Restaurants Inc (NYSE:DRI)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

DRI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: -0.87
Current: -2.85

-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 -2.84.


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 * 0.9093+0.528 * 0.9462+0.404 * 1.3068+0.892 * 1.0251+0.115 * 0.7258
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9023+4.679 * -0.0972-0.327 * 0.8035
=-2.85

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $44 Mil.
Revenue was 1790.2 + 1847.5 + 1608.8 + 1687 = $6,934 Mil.
Gross Profit was 407.9 + 432 + 324.9 + 376.3 = $1,541 Mil.
Total Current Assets was $820 Mil.
Total Assets was $4,583 Mil.
Property, Plant and Equipment(Net PPE) was $2,042 Mil.
Depreciation, Depletion and Amortization(DDA) was $290 Mil.
Selling, General & Admin. Expense(SGA) was $623 Mil.
Total Current Liabilities was $1,187 Mil.
Long-Term Debt was $440 Mil.
Net Income was 139.6 + 105.8 + 43.2 + 86.4 = $375 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 223.2 + 406.6 + 52.6 + 138 = $820 Mil.
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.



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)
=(43.9 / 6933.5) / (47.1 / 6764)
=0.00633158 / 0.00696334
=0.9093

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)
=(1422.5 / 6764) / (1541.1 / 6933.5)
=0.21030455 / 0.2222687
=0.9462

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 - (820.3 + 2041.6) / 4582.6) / (1 - (1056.4 + 3215.8) / 5994.7)
=0.37548553 / 0.28733715
=1.3068

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
=6933.5 / 6764
=1.0251

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))
=(319.3 / (319.3 + 3215.8)) / (290.2 / (290.2 + 2041.6))
=0.09032276 / 0.12445321
=0.7258

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)
=(622.9 / 6933.5) / (673.5 / 6764)
=0.08983919 / 0.09957126
=0.9023

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)
=((440 + 1187.1) / 4582.6) / ((1452.3 + 1196.7) / 5994.7)
=0.35506045 / 0.44189034
=0.8035

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
=(375 - 0 - 820.4) / 4582.6
=-0.0972

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 -2.85 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

May07May08May09May10May11May12May13May14May15May16
DSRI 1.20241.25840.49011.62461.04421.53710.46871.00281.10530.9093
GMI 0.99761.04671.02520.95620.95391.03241.05561.06920.97970.9462
AQI 0.84594.82620.91540.96760.9640.96211.23540.94921.17921.3068
SGI 1.03991.19031.08920.98551.05440.71031.11151.06161.07611.0251
DEPI 0.89251.14140.94080.97091.00991.39750.96570.72160.91450.7258
SGAI 1.02041.00390.95231.04351.0291.02391.04151.00260.94060.9023
LVGI 1.0761.10070.9270.91440.99181.09761.03521.00830.76670.8035
TATA -0.1406-0.0755-0.0816-0.0931-0.0762-0.0481-0.0775-0.038-0.0275-0.0972
M-score -3.02-0.87-3.25-2.37-2.79-2.46-3.13-2.62-2.31-2.85

Darden Restaurants Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 1.32951.00280.91590.61840.61081.10530.65340.88280.78250.9093
GMI 1.10611.06911.04241.04481.01250.97980.93380.9110.90990.9462
AQI 0.98150.94921.12471.18791.15621.17921.00311.1131.31911.3068
SGI 0.76211.06161.17211.29941.51871.07611.07961.0751.07431.0251
DEPI 1.33370.72160.65630.57830.50950.91450.89180.64790.68220.7258
SGAI 1.05161.00280.98330.97940.89440.94030.94930.88860.92260.9023
LVGI 0.98291.00830.87970.83580.82520.76670.83990.89140.76430.8035
TATA -0.0598-0.0380.04940.02250.0141-0.0275-0.1066-0.0962-0.1277-0.0972
M-score -2.59-2.62-2.10-2.35-2.22-2.31-3.21-2.96-3.08-2.85
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)
FEEDBACK