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Guess? Inc (NYSE:GES)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

GES' s 10-Year Beneish M-Score Range
Min: -4.39   Max: -1.08
Current: -2.92

-4.39
-1.08

During the past 7 years, the highest Beneish M-Score of Guess? Inc was -1.08. The lowest was -4.39. And the median was -2.95.


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 * 0.9012+0.528 * 1.0616+0.404 * 1.0504+0.892 * 0.9548+0.115 * 0.9566
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0106+4.679 * -0.0812-0.327 * 0.933
=-2.92

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $234 Mil.
Revenue was 608.571 + 522.541 + 768.363 + 613.497 = $2,513 Mil.
Gross Profit was 216.777 + 176.231 + 301.949 + 228.227 = $923 Mil.
Total Current Assets was $1,202 Mil.
Total Assets was $1,740 Mil.
Property, Plant and Equipment(Net PPE) was $309 Mil.
Depreciation, Depletion and Amortization(DDA) was $87 Mil.
Selling, General & Admin. Expense(SGA) was $741 Mil.
Total Current Liabilities was $360 Mil.
Long-Term Debt was $7 Mil.
Net Income was 21.954 + -2.101 + 69.632 + 34.02 = $124 Mil.
Non Operating Income was 4.766 + -1.119 + 1.338 + 3.624 = $9 Mil.
Cash Flow from Operations was 30.596 + -0.233 + 190.653 + 35.122 = $256 Mil.
Accounts Receivable was $272 Mil.
Revenue was 639.012 + 548.914 + 815.118 + 628.828 = $2,632 Mil.
Gross Profit was 248.532 + 197.426 + 332.878 + 247.609 = $1,026 Mil.
Total Current Assets was $1,129 Mil.
Total Assets was $1,681 Mil.
Property, Plant and Equipment(Net PPE) was $341 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $768 Mil.
Total Current Liabilities was $373 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)
=(233.906 / 2512.972) / (271.826 / 2631.872)
=0.09307943 / 0.10328238
=0.9012

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)
=(176.231 / 2631.872) / (216.777 / 2512.972)
=0.39000567 / 0.3673674
=1.0616

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 - (1202.306 + 309.155) / 1740.419) / (1 - (1129.095 + 341.378) / 1681.003)
=0.13155338 / 0.1252407
=1.0504

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
=2512.972 / 2631.872
=0.9548

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))
=(90.49 / (90.49 + 341.378)) / (86.715 / (86.715 + 309.155))
=0.20953162 / 0.21904918
=0.9566

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)
=(740.845 / 2512.972) / (767.791 / 2631.872)
=0.2948083 / 0.29172809
=1.0106

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)
=((6.735 + 360.166) / 1740.419) / ((7.21 + 372.607) / 1681.003)
=0.21081188 / 0.22594665
=0.933

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
=(123.505 - 8.609 - 256.138) / 1740.419
=-0.0812

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 -2.92 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

Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 0.87920.94060.903
GMI 1.00461.07911.0567
AQI 1.02691.1520.8672
SGI 1.08070.9890.9666
DEPI 0.95570.91950.9411
SGAI 1.0191.07370.9673
LVGI 0.88720.9840.9324
TATA -0.0542-0.056-0.1047
M-score -2.73-2.72-3.09

Guess? Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.84410.85760.89980.94060.76160.81220.77960.9030.89540.9012
GMI 1.00871.03641.05491.07161.09111.06851.06081.05671.04331.0616
AQI 1.02891.17121.19921.1521.01230.84140.82910.86721.01321.0504
SGI 1.05310.99740.98130.9890.98250.99950.99890.96660.96770.9548
DEPI 0.95040.93180.93270.91950.88220.92240.93380.94110.98240.9566
SGAI 1.06911.09771.12331.05581.02120.97540.94870.96730.97391.0106
LVGI 0.86590.95790.98620.9840.99630.96030.93730.93240.88240.933
TATA -0.1108-0.114-0.1199-0.056-0.0694-0.1026-0.0959-0.1047-0.0923-0.0812
M-score -3.05-3.07-3.06-2.72-3.00-3.15-3.15-3.09-2.97-2.92
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