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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.
Francescas Holdings Corp has a M-score of -2.42 suggests that the company is not a manipulator.
During the past 5 years, the highest Beneish M-Score of Francescas Holdings Corp was -0.92. The lowest was -3.40. And the median was -2.44.
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 Francescas Holdings Corp 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 * 1.282||+||0.528 * 1.0467||+||0.404 * 1.0005||+||0.892 * 1.1042||+||0.115 * 0.9144|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1186||+||4.679 * -0.0367||-||0.327 * 1.3442|
|This Year (Apr14) TTM:||Last Year (Apr13) TTM:|
|Accounts Receivable was $10.8 Mil.|
Revenue was 85.424 + 92.14 + 79.632 + 89.566 = $346.8 Mil.
Gross Profit was 41.832 + 46.58 + 40.357 + 47.756 = $176.5 Mil.
Total Current Assets was $75.8 Mil.
Total Assets was $150.5 Mil.
Property, Plant and Equipment(Net PPE) was $69.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.8 Mil.
Selling, General & Admin. Expense(SGA) was $106.3 Mil.
Total Current Liabilities was $19.4 Mil.
Long-Term Debt was $15.0 Mil.
Net Income was 8.56 + 10.612 + 8.671 + 14.619 = $42.5 Mil.
Non Operating Income was 0.103 + 0.081 + -0.077 + 0.121 = $0.2 Mil.
Cash Flow from Operations was 9.71 + 22.709 + 7.328 + 8.016 = $47.8 Mil.
|Accounts Receivable was $7.6 Mil.
Revenue was 78.987 + 86.7 + 71.986 + 76.365 = $314.0 Mil.
Gross Profit was 41.372 + 46.27 + 37.871 + 41.816 = $167.3 Mil.
Total Current Assets was $73.1 Mil.
Total Assets was $133.1 Mil.
Property, Plant and Equipment(Net PPE) was $55.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.8 Mil.
Selling, General & Admin. Expense(SGA) was $86.0 Mil.
Total Current Liabilities was $22.6 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(10.822 / 346.762)||/||(7.645 / 314.038)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(46.58 / 314.038)||/||(41.832 / 346.762)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (75.836 + 69.799) / 150.472)||/||(1 - (73.077 + 55.729) / 133.082)|
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.
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))|
|=||(7.781 / (7.781 + 55.729))||/||(10.799 / (10.799 + 69.799))|
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)|
|=||(106.256 / 346.762)||/||(86.026 / 314.038)|
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)|
|=||((15 + 19.398) / 150.472)||/||((0 + 22.633) / 133.082)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(42.462 - 0.228||-||47.763)||/||150.472|
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.
Francescas Holdings Corp has a M-score of -2.42 suggests that the company will not be a manipulator.
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
Francescas Holdings Corp Annual Data
Francescas Holdings Corp Quarterly Data