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GuruFocus has detected 1 Warning Sign with New York & Co Inc $NWY.
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New York & Co Inc (NYSE:NWY)
Beneish M-Score
-1.29 (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.

New York & Co Inc has a M-score of -1.29 signals that the company is a manipulator.

NWY' s Beneish M-Score Range Over the Past 10 Years
Min: -4.57   Max: -1.29
Current: -1.29

-4.57
-1.29

During the past 13 years, the highest Beneish M-Score of New York & Co Inc was -1.29. The lowest was -4.57. And the median was -2.97.


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 New York & Co 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 * 2.9738+0.528 * 0.9976+0.404 * 0.6809+0.892 * 0.9871+0.115 * 1.0869
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9683+4.679 * -0.1129-0.327 * 0.9082
=-1.29

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $37.1 Mil.
Revenue was 213.901 + 232.819 + 216.038 + 271.272 = $934.0 Mil.
Gross Profit was 63.984 + 67.05 + 59.887 + 69.78 = $260.7 Mil.
Total Current Assets was $235.0 Mil.
Total Assets was $340.6 Mil.
Property, Plant and Equipment(Net PPE) was $88.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.9 Mil.
Selling, General & Admin. Expense(SGA) was $266.2 Mil.
Total Current Liabilities was $165.2 Mil.
Long-Term Debt was $11.7 Mil.
Net Income was -2.532 + 0.945 + -5.716 + 0.084 = $-7.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -3.972 + 24.069 + -11.574 + 22.701 = $31.2 Mil.
Accounts Receivable was $12.6 Mil.
Revenue was 219.75 + 235.696 + 223.39 + 267.359 = $946.2 Mil.
Gross Profit was 63.695 + 67.133 + 64.247 + 68.376 = $263.5 Mil.
Total Current Assets was $209.2 Mil.
Total Assets was $319.9 Mil.
Property, Plant and Equipment(Net PPE) was $87.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.1 Mil.
Selling, General & Admin. Expense(SGA) was $278.5 Mil.
Total Current Liabilities was $169.9 Mil.
Long-Term Debt was $13.0 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)
=(37.076 / 934.03) / (12.63 / 946.195)
=0.03969466 / 0.0133482
=2.9738

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)
=(263.451 / 946.195) / (260.701 / 934.03)
=0.27843204 / 0.27911416
=0.9976

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 - (234.97 + 88.703) / 340.578) / (1 - (209.202 + 87.412) / 319.937)
=0.04963621 / 0.07289873
=0.6809

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
=934.03 / 946.195
=0.9871

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))
=(25.07 / (25.07 + 87.412)) / (22.882 / (22.882 + 88.703))
=0.22288011 / 0.2050634
=1.0869

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)
=(266.24 / 934.03) / (278.541 / 946.195)
=0.28504438 / 0.29438012
=0.9683

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)
=((11.695 + 165.16) / 340.578) / ((13 + 169.925) / 319.937)
=0.51927899 / 0.57175319
=0.9082

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
=(-7.219 - 0 - 31.224) / 340.578
=-0.1129

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.

New York & Co Inc has a M-score of -1.29 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 local exchange's currency.

New York & Co Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.86781.29610.67880.89191.01750.79591.11860.881.07221.0771
GMI 1.03191.09381.10461.03631.09870.98560.84560.97341.04060.9704
AQI 0.88140.35162.03281.29510.60471.41471.0171.01310.98530.7766
SGI 1.05541.00150.95390.88321.01490.93611.01040.97180.98311.029
DEPI 1.04850.9690.82740.91110.83430.88550.95140.93371.15061.143
SGAI 1.07111.00411.07571.01411.07260.92061.01041.0241.0330.9996
LVGI 0.7890.94570.96591.04051.21631.09230.97881.00691.17960.981
TATA -0.0805-0.181-0.1053-0.1576-0.2457-0.1009-0.0864-0.0883-0.0959-0.1084
M-score -2.90-3.25-2.86-3.31-3.81-3.07-2.84-3.05-2.91-2.97

New York & Co Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.11961.01731.07221.18721.18341.23511.07711.04222.93882.9738
GMI 0.99661.00491.04061.02881.02261.00130.97040.9830.99030.9976
AQI 1.01310.94880.98530.95670.9891.01430.77660.74920.69230.6809
SGI 0.97170.96570.98310.99561.00261.02071.0291.01691.00330.9871
DEPI 1.03691.11541.15061.14251.21081.14881.1431.11471.10241.0869
SGAI 1.00821.02731.0331.05661.07041.04770.99960.97630.96820.9683
LVGI 1.00531.10311.17961.21891.15331.05610.9811.02890.89170.9082
TATA -0.0834-0.1068-0.0959-0.1264-0.1206-0.1097-0.1084-0.1164-0.1199-0.1129
M-score -2.78-3.04-2.91-2.97-2.90-2.76-2.97-3.07-1.33-1.29
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