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Jakks Pacific Inc (NAS:JAKK)
Beneish M-Score
-2.59 (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.

Jakks Pacific Inc has a M-score of -2.59 suggests that the company is not a manipulator.

JAKK' s 10-Year Beneish M-Score Range
Min: -6.76   Max: 0.02
Current: -2.59

-6.76
0.02

During the past 13 years, the highest Beneish M-Score of Jakks Pacific Inc was 0.02. The lowest was -6.76. And the median was -2.58.


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 * 1.0819+0.528 * 0.8284+0.404 * 0.7455+0.892 * 1.0364+0.115 * 0.9673
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8417+4.679 * 0.0095-0.327 * 1.2691
=-2.59

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $133.4 Mil.
Revenue was 124.172 + 82.51 + 137.73 + 310.894 = $655.3 Mil.
Gross Profit was 37.818 + 23.555 + 38.767 + 91.395 = $191.5 Mil.
Total Current Assets was $400.1 Mil.
Total Assets was $534.1 Mil.
Property, Plant and Equipment(Net PPE) was $14.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.5 Mil.
Selling, General & Admin. Expense(SGA) was $187.7 Mil.
Total Current Liabilities was $201.6 Mil.
Long-Term Debt was $215.0 Mil.
Net Income was -9.053 + -16.305 + -16.068 + 36.597 = $-4.8 Mil.
Non Operating Income was 0 + 0.314 + 4.876 + -0.572 = $4.6 Mil.
Cash Flow from Operations was -21.582 + -11.05 + 67.932 + -49.833 = $-14.5 Mil.
Accounts Receivable was $118.9 Mil.
Revenue was 106.232 + 78.069 + 133.507 + 314.491 = $632.3 Mil.
Gross Profit was 2.238 + 23.379 + 30.766 + 96.712 = $153.1 Mil.
Total Current Assets was $280.2 Mil.
Total Assets was $422.1 Mil.
Property, Plant and Equipment(Net PPE) was $15.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.5 Mil.
Selling, General & Admin. Expense(SGA) was $215.1 Mil.
Total Current Liabilities was $163.1 Mil.
Long-Term Debt was $96.3 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)
=(133.35 / 655.306) / (118.923 / 632.299)
=0.20349272 / 0.18808032
=1.0819

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)
=(23.555 / 632.299) / (37.818 / 655.306)
=0.24212437 / 0.2922833
=0.8284

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 - (400.06 + 14.277) / 534.115) / (1 - (280.163 + 14.956) / 422.087)
=0.22425508 / 0.30081002
=0.7455

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
=655.306 / 632.299
=1.0364

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))
=(23.518 / (23.518 + 14.956)) / (24.513 / (24.513 + 14.277))
=0.61126995 / 0.63194122
=0.9673

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)
=(187.677 / 655.306) / (215.147 / 632.299)
=0.28639597 / 0.34026149
=0.8417

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 + 201.613) / 534.115) / ((96.283 + 163.133) / 422.087)
=0.78000618 / 0.61460315
=1.2691

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
=(-4.829 - 4.618 - -14.533) / 534.115
=0.0095

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 -2.59 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.

Jakks Pacific Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.6530.74021.51771.01740.92381.09140.92280.99561.02971.019
GMI 1.0190.97621.04671.021.0621.40820.77031.14520.96421.2061
AQI 1.00320.9321.11830.94411.15290.32370.99711.00251.45151.093
SGI 1.81861.1521.1571.11981.0540.88960.92980.9070.98380.9493
DEPI 0.64461.2050.90521.09581.12810.78171.00091.02061.01130.8834
SGAI 0.89570.90050.97920.95551.05671.05760.92261.0911.11380.9993
LVGI 1.2370.85081.0380.89330.90121.55650.88421.03271.62131.1165
TATA -0.1373-0.0207-0.0052-0.0202-0.0018-0.7383-0.0416-0.0679-0.2381-0.0762
M-score -2.80-2.63-1.84-2.41-2.38-6.22-2.88-2.83-3.64-2.77

Jakks Pacific Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.17831.2321.10191.02971.09180.89421.13421.0191.0581.0819
GMI 1.15451.16181.18630.96420.96681.16391.17431.20611.20370.8284
AQI 0.97930.95431.84291.45151.49261.83320.88531.0931.07080.7455
SGI 0.91460.92190.91790.98380.98910.91340.93230.94930.94931.0364
DEPI 1.02811.00650.93671.01130.96990.93090.9870.88340.88060.9673
SGAI 1.10281.10811.15641.11381.10761.17591.09010.99930.93680.8417
LVGI 1.11561.14141.26891.62131.72661.60341.28321.11651.11331.2691
TATA -0.0766-0.0661-0.0486-0.2381-0.2656-0.3933-0.1946-0.0762-0.04530.0095
M-score -2.73-2.64-2.37-3.64-3.73-4.31-3.39-2.77-2.59-2.59
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