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GuruFocus has detected 5 Warning Signs with Guess? Inc $GES.
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Guess? Inc (NYSE:GES)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

GES' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Max: -1.05
Current: -2.69

-3.22
-1.05

During the past 13 years, the highest Beneish M-Score of Guess? Inc was -1.05. The lowest was -3.22. And the median was -2.71.


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 * 1.0501+0.528 * 1.0593+0.404 * 1.0041+0.892 * 1.0023+0.115 * 0.9768
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0214+4.679 * -0.0519-0.327 * 1.1232
=-2.69

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $235 Mil.
Revenue was 679.273 + 536.321 + 544.959 + 448.815 = $2,209 Mil.
Gross Profit was 236.407 + 180.242 + 185.632 + 142.759 = $745 Mil.
Total Current Assets was $1,044 Mil.
Total Assets was $1,534 Mil.
Property, Plant and Equipment(Net PPE) was $243 Mil.
Depreciation, Depletion and Amortization(DDA) was $69 Mil.
Selling, General & Admin. Expense(SGA) was $682 Mil.
Total Current Liabilities was $345 Mil.
Long-Term Debt was $23 Mil.
Net Income was 6.567 + 9.103 + 32.269 + -25.178 = $23 Mil.
Non Operating Income was 4.492 + 0.125 + 27.39 + -1.098 = $31 Mil.
Cash Flow from Operations was 102.231 + -13.167 + 13.236 + -30.844 = $71 Mil.
Accounts Receivable was $223 Mil.
Revenue was 658.259 + 520.964 + 546.264 + 478.824 = $2,204 Mil.
Gross Profit was 240.164 + 183.664 + 198.117 + 165.485 = $787 Mil.
Total Current Assets was $1,036 Mil.
Total Assets was $1,539 Mil.
Property, Plant and Equipment(Net PPE) was $255 Mil.
Depreciation, Depletion and Amortization(DDA) was $71 Mil.
Selling, General & Admin. Expense(SGA) was $666 Mil.
Total Current Liabilities was $327 Mil.
Long-Term Debt was $2 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)
=(234.69 / 2209.368) / (222.972 / 2204.311)
=0.10622495 / 0.1011527
=1.0501

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)
=(787.43 / 2204.311) / (745.04 / 2209.368)
=0.35722273 / 0.33721861
=1.0593

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 - (1044.012 + 243.005) / 1534.485) / (1 - (1036.252 + 255.344) / 1538.748)
=0.16127105 / 0.16061889
=1.0041

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
=2209.368 / 2204.311
=1.0023

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))
=(70.684 / (70.684 + 255.344)) / (69.319 / (69.319 + 243.005))
=0.21680346 / 0.2219458
=0.9768

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)
=(681.864 / 2209.368) / (666.08 / 2204.311)
=0.308624 / 0.30217152
=1.0214

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)
=((23.482 + 345.453) / 1534.485) / ((2.318 + 327.059) / 1538.748)
=0.2404292 / 0.21405519
=1.1232

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
=(22.761 - 30.909 - 71.456) / 1534.485
=-0.0519

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 -2.69 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 local exchange's currency.

Guess? Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.29150.86861.07761.05910.87920.96470.80230.84711.21761.0501
GMI 0.96731.02790.99641.00921.0121.07911.05671.05821.00491.0593
AQI 0.87790.88030.94421.24611.02691.1520.86721.13521.11581.0041
SGI 1.47651.19631.01681.16861.08070.9890.96660.94080.91171.0023
DEPI 1.04310.83381.07391.13780.95570.91950.94110.86691.13860.9768
SGAI 1.00250.98530.99831.00731.01681.07190.96731.06420.98461.0214
LVGI 0.93680.83190.82711.13070.88720.9840.93240.89911.11251.1232
TATA 0.0063-0.003-0.0778-0.0435-0.0542-0.056-0.1047-0.0483-0.0679-0.0519
M-score -1.80-2.44-2.72-2.40-2.73-2.70-3.18-2.81-2.65-2.69

Guess? Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.83260.84710.77520.88650.94571.21761.18811.26441.31141.0501
GMI 1.05411.05821.03991.01281.01331.00491.02661.04781.05311.0593
AQI 1.0991.13521.0991.12731.12041.11581.12641.07531.04531.0041
SGI 0.95140.94080.93340.91990.9010.91170.91590.940.97571.0023
DEPI 0.90670.86690.86080.89020.96951.13861.19871.22441.19380.9768
SGAI 1.0441.06421.05591.04171.00960.98461.011.00211.0061.0214
LVGI 0.89660.89910.96740.97471.1061.11251.19741.1191.13431.1232
TATA -0.0532-0.0483-0.0546-0.0669-0.0978-0.0679-0.0575-0.041-0.0295-0.0519
M-score -2.84-2.81-2.96-2.92-3.06-2.65-2.63-2.44-2.33-2.69
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