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Guess? Inc (NYSE:GES)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

GES' s 10-Year Beneish M-Score Range
Min: -4.39   Max: -1.08
Current: -2.84

-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 -2.84.


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 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 * 0.8326+0.528 * 1.0541+0.404 * 1.099+0.892 * 0.9514+0.115 * 0.9067
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.044+4.679 * -0.0532-0.327 * 0.8966
=-2.84

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
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.
Net Income was 20.788 + 21.954 + -2.101 + 69.632 = $110 Mil.
Non Operating Income was 7.484 + 4.766 + -1.119 + 1.338 = $12 Mil.
Cash Flow from Operations was -35.247 + 30.596 + -0.233 + 190.653 = $186 Mil.
Accounts Receivable was $259 Mil.
Revenue was 613.497 + 639.012 + 548.914 + 815.118 = $2,617 Mil.
Gross Profit was 228.227 + 248.532 + 197.426 + 332.878 = $1,007 Mil.
Total Current Assets was $1,150 Mil.
Total Assets was $1,697 Mil.
Property, Plant and Equipment(Net PPE) was $337 Mil.
Depreciation, Depletion and Amortization(DDA) was $89 Mil.
Selling, General & Admin. Expense(SGA) was $757 Mil.
Total Current Liabilities was $362 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)
=(205.086 / 2489.309) / (258.909 / 2616.541)
=0.08238672 / 0.09895087
=0.8326

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)
=(216.777 / 2616.541) / (213.958 / 2489.309)
=0.38488332 / 0.36512743
=1.0541

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 - (1138.429 + 290.434) / 1654.096) / (1 - (1149.725 + 336.858) / 1696.831)
=0.13616682 / 0.12390627
=1.099

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
=2489.309 / 2616.541
=0.9514

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))
=(88.995 / (88.995 + 336.858)) / (86.994 / (86.994 + 290.434))
=0.20898056 / 0.23049164
=0.9067

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)
=(751.559 / 2489.309) / (756.678 / 2616.541)
=0.30191471 / 0.28919019
=1.044

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)
=((6.738 + 316.674) / 1654.096) / ((7.613 + 362.421) / 1696.831)
=0.1955219 / 0.21807357
=0.8966

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
=(110.273 - 12.469 - 185.769) / 1654.096
=-0.0532

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 -2.84 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

Dec04Dec05Dec06Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 1.44361.18141.28871.29150.8621.06371.08110.87920.88970.87
GMI 0.92050.92340.92840.96731.02790.99641.01651.01161.07161.0567
AQI 0.89171.38541.05840.87790.88030.94351.2471.02691.1520.8672
SGI 1.14561.28361.26611.47651.19631.01681.16861.08070.9890.9666
DEPI 0.98621.22361.03091.04310.83381.07391.13780.95570.91950.9411
SGAI 0.96760.9950.92371.00250.98530.99831.00341.03631.05580.9673
LVGI 0.90241.040.84490.93680.83190.8291.12810.88720.9840.9324
TATA -0.2346-0.2111-0.10130.0063-0.003-0.0777-0.0435-0.0542-0.056-0.1047
M-score -3.09-2.92-2.40-1.80-2.44-2.73-2.38-2.73-2.77-3.12

Guess? Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 0.85760.89980.88970.76160.81220.77960.870.98680.8480.8326
GMI 1.03641.05491.07161.09111.06851.06081.05671.04331.06161.0541
AQI 1.17121.19921.1521.01230.84140.82910.86721.01321.05041.099
SGI 0.99740.98130.9890.98250.99950.99890.96660.96770.95480.9514
DEPI 0.93180.93270.91950.88220.92240.93380.94110.98240.95660.9067
SGAI 1.09771.12331.05581.02120.97540.94870.96730.97391.01061.044
LVGI 0.95790.98620.9840.99630.96030.93730.93240.88240.9330.8966
TATA -0.0615-0.0692-0.056-0.0694-0.1026-0.0959-0.1047-0.0923-0.0812-0.0532
M-score -2.82-2.83-2.77-3.00-3.15-3.15-3.12-2.88-2.97-2.84
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