Switch to:
Guess? Inc (NYSE:GES)
Beneish M-Score
-2.44 (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 -2.44 suggests that the company is not a manipulator.

GES' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: -0.78
Current: -2.44

-3.9
-0.78

During the past 13 years, the highest Beneish M-Score of Guess? Inc was -0.78. The lowest was -3.90. And the median was -2.78.


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 * 1.2644+0.528 * 1.0478+0.404 * 1.0753+0.892 * 0.94+0.115 * 1.2244
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0021+4.679 * -0.041-0.327 * 1.119
=-2.44

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

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Accounts Receivable was $213 Mil.
Revenue was 544.959 + 448.815 + 658.259 + 520.964 = $2,173 Mil.
Gross Profit was 185.632 + 142.759 + 240.164 + 183.664 = $752 Mil.
Total Current Assets was $1,052 Mil.
Total Assets was $1,575 Mil.
Property, Plant and Equipment(Net PPE) was $272 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $669 Mil.
Total Current Liabilities was $338 Mil.
Long-Term Debt was $24 Mil.
Net Income was 32.269 + -25.178 + 47.777 + 12.444 = $67 Mil.
Non Operating Income was 27.39 + -1.098 + 0.256 + 0.247 = $27 Mil.
Cash Flow from Operations was 13.236 + -30.844 + 114.702 + 7.991 = $105 Mil.
Accounts Receivable was $180 Mil.
Revenue was 546.264 + 478.824 + 696.727 + 589.834 = $2,312 Mil.
Gross Profit was 198.117 + 165.485 + 260.919 + 213.958 = $838 Mil.
Total Current Assets was $1,090 Mil.
Total Assets was $1,564 Mil.
Property, Plant and Equipment(Net PPE) was $242 Mil.
Depreciation, Depletion and Amortization(DDA) was $79 Mil.
Selling, General & Admin. Expense(SGA) was $710 Mil.
Total Current Liabilities was $319 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)
=(213.348 / 2172.997) / (179.501 / 2311.649)
=0.09818145 / 0.07765063
=1.2644

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)
=(838.479 / 2311.649) / (752.219 / 2172.997)
=0.36271899 / 0.34616661
=1.0478

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 - (1052.338 + 271.512) / 1575.016) / (1 - (1090.154 + 241.579) / 1563.612)
=0.15946886 / 0.14829702
=1.0753

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
=2172.997 / 2311.649
=0.94

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))
=(78.849 / (78.849 + 241.579)) / (68.29 / (68.29 + 271.512))
=0.246074 / 0.20096998
=1.2244

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)
=(668.741 / 2172.997) / (709.894 / 2311.649)
=0.30775054 / 0.3070942
=1.0021

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)
=((23.639 + 338.476) / 1575.016) / ((2.057 + 319.216) / 1563.612)
=0.22991195 / 0.20546849
=1.119

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
=(67.312 - 26.795 - 105.085) / 1575.016
=-0.041

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 -2.44 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.29150.8621.06371.08110.87920.88970.870.96841.065
GMI 0.96731.02790.99641.01651.01161.07161.05671.05821.0049
AQI 0.87790.88030.94351.2471.02691.1520.86721.22911.0306
SGI 1.47651.19631.01681.16861.08070.9890.96660.94080.9117
DEPI 1.04310.83381.07391.13780.95570.91950.94110.86691.1386
SGAI 1.00250.98530.99831.00341.03631.05580.96731.06420.9846
LVGI 0.93680.83190.8291.12810.88720.9840.93240.89911.1125
TATA 0.0063-0.003-0.0777-0.0435-0.0542-0.056-0.1047-0.0483-0.0679
M-score -1.80-2.44-2.73-2.38-2.73-2.77-3.12-2.66-2.82

Guess? Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 0.8480.83260.96840.77520.88650.94571.0651.18811.26441.2798
GMI 1.06161.05411.05821.03991.01281.01331.00491.02661.04781.0531
AQI 1.05041.0991.22911.0991.12731.12041.03061.12641.07531.0453
SGI 0.95480.95140.94080.93340.91990.9010.91170.91590.940.9757
DEPI 0.95660.90670.86690.86080.89020.96951.13861.19871.22441.517
SGAI 1.01061.0441.06421.05591.04171.00960.98461.011.00211.006
LVGI 0.9330.89660.89910.96740.97471.1061.11251.19741.1191.1343
TATA -0.0812-0.0532-0.0483-0.0546-0.0669-0.0978-0.0679-0.0575-0.041-0.0295
M-score -2.97-2.84-2.66-2.96-2.92-3.06-2.82-2.63-2.44-2.32
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK