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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 7.80. The lowest was -4.72. And the median was -2.38.
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 * 0.8405||+||0.528 * 1||+||0.404 * 0.9658||+||0.892 * 0.988||+||0.115 * 1.247|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0656||+||4.679 * -0.156||-||0.327 * 1.0807|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $90.6 Mil.|
Revenue was 90.944 + 95.743 + 94.632 + 94.653 = $376.0 Mil.
Gross Profit was 90.944 + 95.743 + 94.632 + 94.653 = $376.0 Mil.
Total Current Assets was $370.2 Mil.
Total Assets was $2,456.6 Mil.
Property, Plant and Equipment(Net PPE) was $7.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.6 Mil.
Selling, General & Admin. Expense(SGA) was $210.6 Mil.
Total Current Liabilities was $143.6 Mil.
Long-Term Debt was $1,213.9 Mil.
Net Income was 15.216 + 11.582 + 18.616 + -263.014 = $-217.6 Mil.
Non Operating Income was 13.615 + 4.968 + 0.2 + 12.586 = $31.4 Mil.
Cash Flow from Operations was 20.243 + 26.634 + 32.051 + 55.227 = $134.2 Mil.
|Accounts Receivable was $109.1 Mil.
Revenue was 91.332 + 97.398 + 95.814 + 96.009 = $380.6 Mil.
Gross Profit was 91.332 + 97.398 + 95.814 + 96.009 = $380.6 Mil.
Total Current Assets was $369.0 Mil.
Total Assets was $3,043.7 Mil.
Property, Plant and Equipment(Net PPE) was $7.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.2 Mil.
Selling, General & Admin. Expense(SGA) was $200.0 Mil.
Total Current Liabilities was $436.3 Mil.
Long-Term Debt was $1,120.1 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)|
|=||(90.589 / 375.972)||/||(109.09 / 380.553)|
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)|
|=||(380.553 / 380.553)||/||(375.972 / 375.972)|
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 - (370.181 + 7.304) / 2456.554)||/||(1 - (369.021 + 7.501) / 3043.701)|
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))|
|=||(5.223 / (5.223 + 7.501))||/||(3.584 / (3.584 + 7.304))|
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)|
|=||(210.598 / 375.972)||/||(200.037 / 380.553)|
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)|
|=||((1213.941 + 143.575) / 2456.554)||/||((1120.098 + 436.299) / 3043.701)|
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|
|=||(-217.6 - 31.369||-||134.155)||/||2456.554|
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 -3.39 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