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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
-3.12 (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 -3.12 suggests that the company is not a manipulator.

NWY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.81   Max: -2.37
Current: -3.12

-3.81
-2.37

During the past 13 years, the highest Beneish M-Score of New York & Co Inc was -2.37. The lowest was -3.81. And the median was -3.01.


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 * 1.4748+0.528 * 0.9811+0.404 * 0.9226+0.892 * 0.9779+0.115 * 1.0316
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0466+4.679 * -0.219-0.327 * 0.9514
=-3.12

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $11.8 Mil.
Revenue was 266.323 + 213.901 + 232.819 + 216.038 = $929.1 Mil.
Gross Profit was 73.058 + 63.984 + 67.05 + 59.887 = $264.0 Mil.
Total Current Assets was $198.0 Mil.
Total Assets was $301.6 Mil.
Property, Plant and Equipment(Net PPE) was $87.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.8 Mil.
Selling, General & Admin. Expense(SGA) was $279.4 Mil.
Total Current Liabilities was $138.4 Mil.
Long-Term Debt was $11.5 Mil.
Net Income was -9.988 + -2.532 + 0.945 + -5.716 = $-17.3 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 40.237 + -3.972 + 24.069 + -11.574 = $48.8 Mil.
Accounts Receivable was $8.2 Mil.
Revenue was 271.272 + 219.75 + 235.696 + 223.39 = $950.1 Mil.
Gross Profit was 69.78 + 63.695 + 67.133 + 64.247 = $264.9 Mil.
Total Current Assets was $177.8 Mil.
Total Assets was $283.5 Mil.
Property, Plant and Equipment(Net PPE) was $88.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.2 Mil.
Selling, General & Admin. Expense(SGA) was $273.0 Mil.
Total Current Liabilities was $135.7 Mil.
Long-Term Debt was $12.3 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)
=(11.837 / 929.081) / (8.208 / 950.108)
=0.01274055 / 0.00863902
=1.4748

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)
=(264.855 / 950.108) / (263.979 / 929.081)
=0.27876305 / 0.28412916
=0.9811

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 - (197.964 + 87.07) / 301.588) / (1 - (177.764 + 88.831) / 283.46)
=0.05488945 / 0.05949693
=0.9226

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
=929.081 / 950.108
=0.9779

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))
=(24.181 / (24.181 + 88.831)) / (22.786 / (22.786 + 87.07))
=0.21396843 / 0.20741698
=1.0316

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)
=(279.362 / 929.081) / (272.96 / 950.108)
=0.30068638 / 0.28729366
=1.0466

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)
=((11.485 + 138.377) / 301.588) / ((12.326 + 135.729) / 283.46)
=0.49690969 / 0.52231355
=0.9514

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
=(-17.291 - 0 - 48.76) / 301.588
=-0.219

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 -3.12 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 local exchange's currency.

New York & Co Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.29610.67880.89191.01750.79591.11860.881.07221.07711.4748
GMI 1.09381.10461.03631.09870.98560.84560.97341.04060.97040.9811
AQI 0.35162.03281.29510.60471.41471.0171.01310.98530.77660.9226
SGI 1.00150.95390.88321.01490.93611.01040.97180.98311.0290.9779
DEPI 0.9690.82740.91110.83430.88550.95140.93371.15061.1431.0316
SGAI 1.00411.07571.01411.07260.92061.01041.0241.0330.99961.0466
LVGI 0.94570.96591.04051.21631.09230.97881.00691.17960.9810.9514
TATA -0.181-0.1053-0.1576-0.2457-0.1009-0.0864-0.0883-0.0959-0.1084-0.219
M-score -3.25-2.86-3.31-3.81-3.07-2.84-3.05-2.91-2.97-3.12

New York & Co Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.01731.07221.18721.18341.23511.07711.04222.93882.97381.4748
GMI 1.00491.04061.02881.02261.00130.97040.9830.99030.99760.9811
AQI 0.94880.98530.95670.9891.01430.77660.74920.69230.68090.9226
SGI 0.96570.98310.99561.00261.02071.0291.01691.00330.98710.9779
DEPI 1.11541.15061.14251.21081.14881.1431.11471.10241.08691.0316
SGAI 1.02731.0331.05661.07041.04770.99960.97630.96820.96831.0466
LVGI 1.10311.17961.21891.15331.05610.9811.02890.89170.90820.9514
TATA -0.1068-0.0959-0.1264-0.1206-0.1097-0.1084-0.1164-0.1199-0.1129-0.219
M-score -3.04-2.91-2.97-2.90-2.76-2.97-3.07-1.33-1.29-3.12
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