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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 -2.23. The lowest was -4.57. And the median was -2.98.
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 * 1.2351||+||0.528 * 1.0013||+||0.404 * 1.0143||+||0.892 * 1.0207||+||0.115 * 1.1488|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0477||+||4.679 * -0.1097||-||0.327 * 1.0561|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|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.
Net Income was -5.336 + -0.146 + -4.671 + -6.72 = $-16.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -7.883 + 19.433 + -13.602 + 20.273 = $18.2 Mil.
|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.
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)|
|=||(12.63 / 946.195)||/||(10.018 / 926.977)|
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)|
|=||(67.133 / 926.977)||/||(63.695 / 946.195)|
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 - (209.202 + 87.412) / 319.937)||/||(1 - (215.013 + 82.833) / 320.91)|
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))|
|=||(28.507 / (28.507 + 82.833))||/||(25.07 / (25.07 + 87.412))|
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)|
|=||(278.541 / 946.195)||/||(260.456 / 926.977)|
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)|
|=||((13 + 169.925) / 319.937)||/||((14 + 159.734) / 320.91)|
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|
|=||(-16.873 - 0||-||18.221)||/||319.937|
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 -2.76 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