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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 Jakks Pacific Inc was 0.01. The lowest was -7.03. And the median was -2.48.
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 * 0.9482||+||0.528 * 0.9537||+||0.404 * 0.9476||+||0.892 * 0.8641||+||0.115 * 1.1806|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1454||+||4.679 * -0.1281||-||0.327 * 0.9862|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $85.5 Mil.|
Revenue was 95.809 + 163.407 + 337.027 + 131.106 = $727.3 Mil.
Gross Profit was 31.183 + 49.575 + 104.329 + 39.287 = $224.4 Mil.
Total Current Assets was $314.8 Mil.
Total Assets was $430.6 Mil.
Property, Plant and Equipment(Net PPE) was $19.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.4 Mil.
Selling, General & Admin. Expense(SGA) was $203.5 Mil.
Total Current Liabilities was $87.8 Mil.
Long-Term Debt was $207.8 Mil.
Net Income was -17.415 + -9.33 + 45.845 + -5.68 = $13.4 Mil.
Non Operating Income was 0.075 + 1.017 + 5.702 + 1.684 = $8.5 Mil.
Cash Flow from Operations was 32.609 + 56.181 + -40.143 + 11.462 = $60.1 Mil.
|Accounts Receivable was $104.3 Mil.
Revenue was 114.201 + 254.016 + 349.362 + 124.172 = $841.8 Mil.
Gross Profit was 35.378 + 79.697 + 94.737 + 37.818 = $247.6 Mil.
Total Current Assets was $346.6 Mil.
Total Assets was $470.3 Mil.
Property, Plant and Equipment(Net PPE) was $13.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.9 Mil.
Selling, General & Admin. Expense(SGA) was $205.6 Mil.
Total Current Liabilities was $112.4 Mil.
Long-Term Debt was $215.0 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)|
|=||(85.471 / 727.349)||/||(104.318 / 841.751)|
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)|
|=||(247.63 / 841.751)||/||(224.374 / 727.349)|
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 - (314.775 + 19.86) / 430.571)||/||(1 - (346.645 + 13.105) / 470.336)|
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))|
|=||(21.882 / (21.882 + 13.105))||/||(22.373 / (22.373 + 19.86))|
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)|
|=||(203.461 / 727.349)||/||(205.578 / 841.751)|
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)|
|=||((207.797 + 87.833) / 430.571)||/||((215 + 112.436) / 470.336)|
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|
|=||(13.42 - 8.478||-||60.109)||/||430.571|
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 -3.29 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
Jakks Pacific Inc Annual Data
Jakks Pacific Inc Quarterly Data