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Guess? Inc (NYSE:GES)
Beneish M-Score
-2.63 (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 -2.63 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: -2.63

-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 -2.79.


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 * 1.1881+0.528 * 1.0266+0.404 * 1.1264+0.892 * 0.9159+0.115 * 1.1987
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.01+4.679 * -0.0575-0.327 * 1.1974
=-2.63

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $189 Mil.
Revenue was 448.815 + 658.259 + 520.964 + 546.264 = $2,174 Mil.
Gross Profit was 142.759 + 240.164 + 183.664 + 198.117 = $765 Mil.
Total Current Assets was $1,026 Mil.
Total Assets was $1,553 Mil.
Property, Plant and Equipment(Net PPE) was $266 Mil.
Depreciation, Depletion and Amortization(DDA) was $69 Mil.
Selling, General & Admin. Expense(SGA) was $671 Mil.
Total Current Liabilities was $319 Mil.
Long-Term Debt was $24 Mil.
Net Income was -25.178 + 47.777 + 12.444 + 18.289 = $53 Mil.
Non Operating Income was -1.098 + 0.256 + 0.247 + 3.708 = $3 Mil.
Cash Flow from Operations was -30.844 + 114.702 + 7.991 + 47.601 = $139 Mil.
Accounts Receivable was $173 Mil.
Revenue was 478.824 + 696.727 + 589.834 + 608.571 = $2,374 Mil.
Gross Profit was 165.485 + 260.919 + 213.958 + 216.777 = $857 Mil.
Total Current Assets was $1,073 Mil.
Total Assets was $1,555 Mil.
Property, Plant and Equipment(Net PPE) was $250 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $725 Mil.
Total Current Liabilities was $285 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)
=(188.769 / 2174.302) / (173.478 / 2373.956)
=0.08681821 / 0.07307549
=1.1881

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)
=(857.139 / 2373.956) / (764.704 / 2174.302)
=0.36105935 / 0.35170091
=1.0266

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 - (1025.65 + 265.818) / 1552.776) / (1 - (1073.098 + 249.784) / 1555.239)
=0.16828441 / 0.14940276
=1.1264

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
=2174.302 / 2373.956
=0.9159

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))
=(81.994 / (81.994 + 249.784)) / (69.034 / (69.034 + 265.818))
=0.24713513 / 0.20616272
=1.1987

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)
=(670.602 / 2174.302) / (724.897 / 2373.956)
=0.30842174 / 0.30535402
=1.01

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)
=((23.539 + 319.422) / 1552.776) / ((2.335 + 284.544) / 1555.239)
=0.22086959 / 0.18445975
=1.1974

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
=(53.332 - 3.113 - 139.45) / 1552.776
=-0.0575

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 -2.63 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

Dec06Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.28871.29150.8621.06371.08110.87920.88970.870.96841.065
GMI 0.92840.96731.02790.99641.00921.0121.07911.05671.05821.0049
AQI 1.05840.87790.88030.94351.2471.02691.1520.86721.22911.0306
SGI 1.26611.47651.19631.01681.16861.08070.9890.96660.94080.9117
DEPI 1.03091.04310.83381.07391.13780.95570.91950.94110.86691.1386
SGAI 0.92371.00370.98420.99831.00731.01681.07190.96731.06420.9846
LVGI 0.84490.93680.83190.8291.12810.88720.9840.93240.89911.1125
TATA -0.02340.0108-0.003-0.0777-0.0435-0.0542-0.056-0.1047-0.0483-0.0679
M-score -2.03-1.78-2.44-2.73-2.38-2.73-2.77-3.12-2.66-2.82

Guess? Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.870.98680.8480.83260.96840.77520.88650.94571.0651.1881
GMI 1.05671.04331.06161.05411.05821.03991.01281.01331.00491.0266
AQI 0.86721.01321.05041.0991.22911.0991.12731.12041.03061.1264
SGI 0.96660.96770.95480.95140.94080.93340.91990.9010.91170.9159
DEPI 0.94110.98240.95660.90670.86690.86080.89020.96951.13861.1987
SGAI 0.96730.97391.01061.0441.06421.05591.04171.00960.98461.01
LVGI 0.93240.88240.9330.89660.89910.96740.97471.1061.11251.1974
TATA -0.1047-0.0923-0.0812-0.0532-0.0483-0.0546-0.0669-0.0978-0.0679-0.0575
M-score -3.12-2.88-2.97-2.84-2.66-2.96-2.92-3.06-2.82-2.63
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