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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 12 years, the highest Beneish M-Score of New York & Company Inc was -2.20. The lowest was -4.57. And the median was -3.03.
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 & Company 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 * 1.0173||+||0.528 * 1.0049||+||0.404 * 0.9488||+||0.892 * 0.9657||+||0.115 * 1.1154|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0273||+||4.679 * -0.1068||-||0.327 * 1.1031|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $10.0 Mil.|
Revenue was 210.314 + 226.066 + 219.593 + 271.004 = $927.0 Mil.
Gross Profit was 57.277 + 61.918 + 62.204 + 77.046 = $258.4 Mil.
Total Current Assets was $215.0 Mil.
Total Assets was $320.9 Mil.
Property, Plant and Equipment(Net PPE) was $82.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.5 Mil.
Selling, General & Admin. Expense(SGA) was $260.5 Mil.
Total Current Liabilities was $159.7 Mil.
Long-Term Debt was $14.0 Mil.
Net Income was -9.736 + -0.147 + -0.282 + 6.943 = $-3.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -10.414 + 21.019 + -18.878 + 39.338 = $31.1 Mil.
|Accounts Receivable was $10.2 Mil.
Revenue was 217.626 + 223.05 + 227.483 + 291.758 = $959.9 Mil.
Gross Profit was 60.988 + 60.002 + 66.334 + 81.625 = $268.9 Mil.
Total Current Assets was $192.0 Mil.
Total Assets was $300.0 Mil.
Property, Plant and Equipment(Net PPE) was $85.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.1 Mil.
Selling, General & Admin. Expense(SGA) was $262.5 Mil.
Total Current Liabilities was $147.2 Mil.
Long-Term Debt was $0.0 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)|
|=||(10.018 / 926.977)||/||(10.198 / 959.917)|
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)|
|=||(61.918 / 959.917)||/||(57.277 / 926.977)|
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 - (215.013 + 82.833) / 320.91)||/||(1 - (192.03 + 85.249) / 300.005)|
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))|
|=||(34.078 / (34.078 + 85.249))||/||(28.507 / (28.507 + 82.833))|
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)|
|=||(260.456 / 926.977)||/||(262.544 / 959.917)|
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)|
|=||((14 + 159.734) / 320.91)||/||((0 + 147.24) / 300.005)|
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|
|=||(-3.222 - 0||-||31.065)||/||320.91|
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 & Company Inc has a M-score of -3.04 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
New York & Company Inc Annual Data
New York & Company Inc Quarterly Data