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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 -4.41. And the median was -2.25.
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 * 1.2272||+||0.528 * 1||+||0.404 * 1.0369||+||0.892 * 1.0661||+||0.115 * 1.1148|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0996||+||4.679 * -0.0093||-||0.327 * 0.9783|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $118.8 Mil.|
Revenue was 112.412 + 113.75 + 118.943 + 116.138 = $461.2 Mil.
Gross Profit was 112.412 + 113.75 + 118.943 + 116.138 = $461.2 Mil.
Total Current Assets was $385.3 Mil.
Total Assets was $2,873.4 Mil.
Property, Plant and Equipment(Net PPE) was $7.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.1 Mil.
Selling, General & Admin. Expense(SGA) was $205.4 Mil.
Total Current Liabilities was $137.1 Mil.
Long-Term Debt was $1,333.0 Mil.
Net Income was 23.87 + 33.779 + 35.319 + 59.768 = $152.7 Mil.
Non Operating Income was 4.149 + 4.084 + 5.675 + 3.122 = $17.0 Mil.
Cash Flow from Operations was 38.075 + 40.215 + 30.491 + 53.74 = $162.5 Mil.
|Accounts Receivable was $90.8 Mil.
Revenue was 105.264 + 107.175 + 115.125 + 105.062 = $432.6 Mil.
Gross Profit was 105.264 + 107.175 + 115.125 + 105.062 = $432.6 Mil.
Total Current Assets was $471.0 Mil.
Total Assets was $2,864.2 Mil.
Property, Plant and Equipment(Net PPE) was $8.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.1 Mil.
Selling, General & Admin. Expense(SGA) was $175.2 Mil.
Total Current Liabilities was $131.8 Mil.
Long-Term Debt was $1,366.1 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)|
|=||(118.774 / 461.243)||/||(90.777 / 432.626)|
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)|
|=||(113.75 / 432.626)||/||(112.412 / 461.243)|
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 - (385.268 + 7.758) / 2873.391)||/||(1 - (471.008 + 8.837) / 2864.158)|
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))|
|=||(10.13 / (10.13 + 8.837))||/||(7.135 / (7.135 + 7.758))|
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)|
|=||(205.41 / 461.243)||/||(175.215 / 432.626)|
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)|
|=||((1332.954 + 137.128) / 2873.391)||/||((1366.069 + 131.822) / 2864.158)|
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|
|=||(152.736 - 17.03||-||162.521)||/||2873.391|
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 -2.24 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