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Jakks Pacific Inc (NAS:JAKK)
Beneish M-Score
-0.88 (As of Today)

Warning Sign:

Beneish M-Score -0.88 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Jakks Pacific Inc has a M-score of -0.88 signals that the company is a manipulator.

JAKK' s 10-Year Beneish M-Score Range
Min: -6.32   Max: -0.88
Current: -0.88

-6.32
-0.88

During the past 13 years, the highest Beneish M-Score of Jakks Pacific Inc was -0.88. The lowest was -6.32. And the median was -2.63.


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 Jakks Pacific 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 * 1.8102+0.528 * 0.8455+0.404 * 0.7686+0.892 * 1.2799+0.115 * 1.0386
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7976+4.679 * 0.1679-0.327 * 1.1433
=-0.88

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $234.5 Mil.
Revenue was 254.016 + 349.362 + 124.172 + 82.51 = $810.1 Mil.
Gross Profit was 79.697 + 94.737 + 37.818 + 23.555 = $235.8 Mil.
Total Current Assets was $437.6 Mil.
Total Assets was $561.8 Mil.
Property, Plant and Equipment(Net PPE) was $11.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.9 Mil.
Selling, General & Admin. Expense(SGA) was $204.5 Mil.
Total Current Liabilities was $191.3 Mil.
Long-Term Debt was $215.0 Mil.
Net Income was 2.798 + 44.069 + -9.053 + -16.305 = $21.5 Mil.
Non Operating Income was 0 + 5.932 + 0 + 0.314 = $6.2 Mil.
Cash Flow from Operations was 26.094 + -72.548 + -21.582 + -11.05 = $-79.1 Mil.
Accounts Receivable was $101.2 Mil.
Revenue was 137.73 + 310.894 + 106.232 + 78.069 = $632.9 Mil.
Gross Profit was 38.767 + 91.395 + 2.238 + 23.379 = $155.8 Mil.
Total Current Assets was $320.9 Mil.
Total Assets was $449.8 Mil.
Property, Plant and Equipment(Net PPE) was $11.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.6 Mil.
Selling, General & Admin. Expense(SGA) was $200.3 Mil.
Total Current Liabilities was $184.6 Mil.
Long-Term Debt was $100.0 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)
=(234.516 / 810.06) / (101.223 / 632.925)
=0.28950448 / 0.1599289
=1.8102

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)
=(94.737 / 632.925) / (79.697 / 810.06)
=0.24612553 / 0.29109819
=0.8455

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 - (437.593 + 11.096) / 561.782) / (1 - (320.932 + 11.096) / 449.844)
=0.20131118 / 0.26190413
=0.7686

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
=810.06 / 632.925
=1.2799

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))
=(24.599 / (24.599 + 11.096)) / (21.883 / (21.883 + 11.096))
=0.68914414 / 0.66354347
=1.0386

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)
=(204.48 / 810.06) / (200.311 / 632.925)
=0.25242575 / 0.31648458
=0.7976

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)
=((215 + 191.348) / 561.782) / ((100 + 184.595) / 449.844)
=0.72331972 / 0.63265265
=1.1433

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
=(21.509 - 6.246 - -79.086) / 561.782
=0.1679

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.

Jakks Pacific Inc has a M-score of -0.88 signals that the company is likely to 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.

Jakks Pacific Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.74021.51771.01740.80260.98961.01380.9331.03431.01121.8102
GMI 0.97621.04671.021.0621.40820.77031.14520.96421.20610.8455
AQI 0.9321.11830.94411.15290.32370.99711.00251.45151.0930.7686
SGI 1.1521.1571.11981.0540.88960.92980.9070.98380.94931.2799
DEPI 1.2050.90521.09581.12810.78171.00091.02061.01130.88341.0386
SGAI 0.90050.97920.95551.05671.05760.92261.0911.11380.99930.7976
LVGI 0.85081.0380.89330.90121.55650.88421.03271.62131.11651.1433
TATA -0.0207-0.0052-0.0202-0.0018-0.7383-0.0416-0.0679-0.2381-0.07630.1679
M-score -2.63-1.84-2.41-2.49-6.32-2.80-2.89-3.63-2.78-0.88

Jakks Pacific Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.03431.1250.85461.14031.01121.05961.11161.06911.81021.2084
GMI 0.96420.96681.16391.17431.20611.20370.82840.83680.84550.8317
AQI 1.45151.49261.83320.88531.0931.07080.74550.79640.76860.8213
SGI 0.98380.98910.91340.93230.94930.94931.03641.10351.27991.3207
DEPI 1.01130.96990.93091.03370.88340.88060.96730.89531.03861.1313
SGAI 1.11381.10761.17591.09010.99930.93680.84170.81620.79760.8048
LVGI 1.62131.72661.60341.28321.11651.11331.26911.15241.14331.0918
TATA -0.2381-0.2656-0.3933-0.1946-0.0763-0.04540.00940.04310.16790.1963
M-score -3.63-3.70-4.34-3.38-2.78-2.59-2.56-2.32-0.88-1.23
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