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Guess? Inc (NYSE:GES)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

GES' s 10-Year Beneish M-Score Range
Min: -3.77   Max: -1.41
Current: -2.81

-3.77
-1.41

During the past 13 years, the highest Beneish M-Score of Guess? Inc was -1.41. The lowest was -3.77. And the median was -2.81.


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 * 0.8471+0.528 * 1.0582+0.404 * 1.1352+0.892 * 0.9408+0.115 * 0.8669
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0642+4.679 * -0.0483-0.327 * 0.8991
=-2.81

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $201 Mil.
Revenue was 696.727 + 589.834 + 608.571 + 522.541 = $2,418 Mil.
Gross Profit was 260.919 + 213.958 + 216.777 + 176.231 = $868 Mil.
Total Current Assets was $1,111 Mil.
Total Assets was $1,601 Mil.
Property, Plant and Equipment(Net PPE) was $260 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $742 Mil.
Total Current Liabilities was $302 Mil.
Long-Term Debt was $6 Mil.
Net Income was 53.929 + 20.788 + 21.954 + -2.101 = $95 Mil.
Non Operating Income was 6.897 + 7.484 + 4.766 + -1.119 = $18 Mil.
Cash Flow from Operations was 158.71 + -35.247 + 30.596 + -0.233 = $154 Mil.
Accounts Receivable was $252 Mil.
Revenue was 768.363 + 613.497 + 639.012 + 548.914 = $2,570 Mil.
Gross Profit was 301.949 + 228.227 + 248.532 + 197.426 = $976 Mil.
Total Current Assets was $1,216 Mil.
Total Assets was $1,764 Mil.
Property, Plant and Equipment(Net PPE) was $325 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $741 Mil.
Total Current Liabilities was $370 Mil.
Long-Term Debt was $8 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)
=(200.848 / 2417.673) / (252.019 / 2569.786)
=0.08307492 / 0.09807003
=0.8471

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)
=(213.958 / 2569.786) / (260.919 / 2417.673)
=0.37985031 / 0.35897535
=1.0582

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 - (1111.359 + 259.524) / 1601.405) / (1 - (1216.086 + 324.606) / 1764.431)
=0.14394984 / 0.12680519
=1.1352

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
=2417.673 / 2569.786
=0.9408

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))
=(88.369 / (88.369 + 324.606)) / (85.06 / (85.06 + 259.524))
=0.21398148 / 0.24684837
=0.8669

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)
=(741.973 / 2417.673) / (741.105 / 2569.786)
=0.30689551 / 0.28839172
=1.0642

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)
=((6.165 + 301.966) / 1601.405) / ((7.58 + 370.025) / 1764.431)
=0.19241291 / 0.2140095
=0.8991

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
=(94.57 - 18.028 - 153.826) / 1601.405
=-0.0483

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 -2.81 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

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.89980.88970.76160.81220.77960.870.98680.8480.83260.8471
GMI 1.05491.07161.09111.06851.06081.05671.04331.06161.05411.0582
AQI 1.19921.1521.01230.84140.82910.86721.01321.05041.0991.1352
SGI 0.98130.9890.98250.99950.99890.96660.96770.95480.95140.9408
DEPI 0.93270.91950.88220.92240.93380.94110.98240.95660.90670.8669
SGAI 1.12331.05581.02120.97540.94870.96730.97391.01061.0441.0642
LVGI 0.98620.9840.99630.96030.93730.93240.88240.9330.89660.8991
TATA -0.0692-0.056-0.0694-0.1026-0.0959-0.1047-0.0923-0.0812-0.0532-0.0483
M-score -2.83-2.77-3.00-3.15-3.15-3.12-2.88-2.97-2.84-2.81
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