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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.
During the past 13 years, the highest Beneish M-Score of Iconix Brand Group Inc was 7.82. The lowest was -4.72. And the median was -2.37.
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 Iconix Brand Group 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 * 1.056||+||0.528 * 1||+||0.404 * 1.041||+||0.892 * 1.1009||+||0.115 * 1.0143|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0264||+||4.679 * -0.0209||-||0.327 * 0.9724|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $131.8 Mil.|
Revenue was 113.75 + 118.943 + 116.138 + 105.264 = $454.1 Mil.
Gross Profit was 113.75 + 118.943 + 116.138 + 105.264 = $454.1 Mil.
Total Current Assets was $369.9 Mil.
Total Assets was $2,848.2 Mil.
Property, Plant and Equipment(Net PPE) was $7.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.0 Mil.
Selling, General & Admin. Expense(SGA) was $189.8 Mil.
Total Current Liabilities was $142.6 Mil.
Long-Term Debt was $1,340.7 Mil.
Net Income was 33.779 + 35.319 + 59.768 + 26.146 = $155.0 Mil.
Non Operating Income was 4.084 + 5.675 + 3.122 + 4.541 = $17.4 Mil.
Cash Flow from Operations was 40.215 + 30.491 + 53.74 + 72.571 = $197.0 Mil.
|Accounts Receivable was $113.4 Mil.
Revenue was 107.175 + 115.125 + 105.062 + 85.131 = $412.5 Mil.
Gross Profit was 107.175 + 115.125 + 105.062 + 85.131 = $412.5 Mil.
Total Current Assets was $466.4 Mil.
Total Assets was $2,851.7 Mil.
Property, Plant and Equipment(Net PPE) was $9.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.8 Mil.
Selling, General & Admin. Expense(SGA) was $167.9 Mil.
Total Current Liabilities was $153.0 Mil.
Long-Term Debt was $1,374.2 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(131.802 / 454.095)||/||(113.377 / 412.493)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(118.943 / 412.493)||/||(113.75 / 454.095)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (369.92 + 7.812) / 2848.233)||/||(1 - (466.41 + 9.244) / 2851.656)|
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.
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))|
|=||(9.762 / (9.762 + 9.244))||/||(8.014 / (8.014 + 7.812))|
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)|
|=||(189.758 / 454.095)||/||(167.944 / 412.493)|
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)|
|=||((1340.66 + 142.608) / 2848.233)||/||((1374.248 + 152.971) / 2851.656)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(155.012 - 17.422||-||197.017)||/||2848.233|
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.
Iconix Brand Group Inc has a M-score of -2.41 suggests that the company will not be a manipulator.
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
Iconix Brand Group Inc Annual Data
Iconix Brand Group Inc Quarterly Data