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Guess? Inc (NYSE:GES)
Beneish M-Score
-3.06 (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.

Guess? Inc has a M-score of -3.06 suggests that the company is not a manipulator.

GES' s Beneish M-Score Range Over the Past 10 Years
Min: -4.39   Max: -1.08
Current: -3.06

-4.39
-1.08

During the past 13 years, the highest Beneish M-Score of Guess? Inc was -1.08. The lowest was -4.39. And the median was -2.86.


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 Guess? 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 * 0.9457+0.528 * 1.0133+0.404 * 1.1204+0.892 * 0.901+0.115 * 0.9695
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0096+4.679 * -0.0978-0.327 * 1.106
=-3.06

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $175 Mil.
Revenue was 520.964 + 546.264 + 478.824 + 696.727 = $2,243 Mil.
Gross Profit was 183.664 + 198.117 + 165.485 + 260.919 = $808 Mil.
Total Current Assets was $1,050 Mil.
Total Assets was $1,522 Mil.
Property, Plant and Equipment(Net PPE) was $240 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $684 Mil.
Total Current Liabilities was $327 Mil.
Long-Term Debt was $2 Mil.
Net Income was 12.444 + 18.289 + 3.341 + 53.929 = $88 Mil.
Non Operating Income was 0.247 + 3.708 + 2.626 + 6.897 = $13 Mil.
Cash Flow from Operations was 7.991 + 47.601 + 9.135 + 158.71 = $223 Mil.
Accounts Receivable was $205 Mil.
Revenue was 589.834 + 608.571 + 522.541 + 768.363 = $2,489 Mil.
Gross Profit was 213.958 + 216.777 + 176.231 + 301.949 = $909 Mil.
Total Current Assets was $1,138 Mil.
Total Assets was $1,654 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
Depreciation, Depletion and Amortization(DDA) was $87 Mil.
Selling, General & Admin. Expense(SGA) was $752 Mil.
Total Current Liabilities was $317 Mil.
Long-Term Debt was $7 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)
=(174.742 / 2242.779) / (205.086 / 2489.309)
=0.07791316 / 0.08238672
=0.9457

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)
=(198.117 / 2489.309) / (183.664 / 2242.779)
=0.36512743 / 0.36034982
=1.0133

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 - (1050.145 + 240.058) / 1522.472) / (1 - (1138.429 + 290.434) / 1654.096)
=0.15256044 / 0.13616682
=1.1204

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
=2242.779 / 2489.309
=0.901

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))
=(86.994 / (86.994 + 290.434)) / (74.871 / (74.871 + 240.058))
=0.23049164 / 0.2377393
=0.9695

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)
=(683.627 / 2242.779) / (751.559 / 2489.309)
=0.30481247 / 0.30191471
=1.0096

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)
=((2.189 + 327.05) / 1522.472) / ((6.738 + 316.674) / 1654.096)
=0.21625291 / 0.1955219
=1.106

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
=(88.003 - 13.478 - 223.437) / 1522.472
=-0.0978

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.

Guess? Inc has a M-score of -3.06 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.

Guess? Inc Annual Data

Dec05Dec06Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 1.18141.28871.29150.8621.06371.08110.87920.88970.870.8471
GMI 0.92340.92840.96731.02790.99641.01651.01161.07161.05671.0582
AQI 1.38541.05840.87790.88030.94351.2471.02691.1520.86721.1352
SGI 1.28361.26611.47651.19631.01681.16861.08070.9890.96660.9408
DEPI 1.22361.03091.04310.83381.07391.13780.95570.91950.94110.8669
SGAI 0.9950.92371.00250.98530.99831.00341.03631.05580.96731.0642
LVGI 1.040.84490.93680.83190.8291.12810.88720.9840.93240.8991
TATA -0.2111-0.10130.0063-0.003-0.0777-0.0435-0.0542-0.056-0.1047-0.0483
M-score -2.92-2.40-1.80-2.44-2.73-2.38-2.73-2.77-3.12-2.81

Guess? Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 0.81220.77960.870.98680.8480.83260.84710.77520.88650.9457
GMI 1.06851.06081.05671.04331.06161.05411.05821.03991.01281.0133
AQI 0.84140.82910.86721.01321.05041.0991.13521.0991.12731.1204
SGI 0.99950.99890.96660.96770.95480.95140.94080.93340.91990.901
DEPI 0.92240.93380.94110.98240.95660.90670.86690.86080.89020.9695
SGAI 0.97540.94870.96730.97391.01061.0441.06421.05591.04171.0096
LVGI 0.96030.93730.93240.88240.9330.89660.89910.96740.97471.106
TATA -0.1026-0.0959-0.1047-0.0923-0.0812-0.0532-0.0483-0.0546-0.0669-0.0978
M-score -3.15-3.15-3.12-2.88-2.97-2.84-2.81-2.96-2.92-3.06
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