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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 Prestige Brands Holdings Inc was -2.28. The lowest was -4.16. And the median was -2.40.
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 Prestige Brands Holdings 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 * 1.1223||+||0.528 * 0.9881||+||0.404 * 1.026||+||0.892 * 1.1963||+||0.115 * 1.0369|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1333||+||4.679 * -0.0296||-||0.327 * 1.1144|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $85.5 Mil.|
Revenue was 190.046 + 197.606 + 181.269 + 145.702 = $714.6 Mil.
Gross Profit was 110.07 + 111.745 + 102.542 + 81.866 = $406.2 Mil.
Total Current Assets was $201.7 Mil.
Total Assets was $2,669.4 Mil.
Property, Plant and Equipment(Net PPE) was $13.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.7 Mil.
Selling, General & Admin. Expense(SGA) was $180.9 Mil.
Total Current Liabilities was $99.0 Mil.
Long-Term Debt was $1,588.7 Mil.
Net Income was 23.772 + 21.293 + 16.463 + 16.732 = $78.3 Mil.
Non Operating Income was 0 + 1.133 + 0 + 0 = $1.1 Mil.
Cash Flow from Operations was 52.113 + 47.084 + 27.387 + 29.671 = $156.3 Mil.
|Accounts Receivable was $63.7 Mil.
Revenue was 143.053 + 144.871 + 166.945 + 142.512 = $597.4 Mil.
Gross Profit was 78.837 + 80.468 + 93.222 + 83.024 = $335.6 Mil.
Total Current Assets was $177.2 Mil.
Total Assets was $1,795.7 Mil.
Property, Plant and Equipment(Net PPE) was $9.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $133.4 Mil.
Total Current Liabilities was $84.4 Mil.
Long-Term Debt was $934.4 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)|
|=||(85.505 / 714.623)||/||(63.69 / 597.381)|
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)|
|=||(111.745 / 597.381)||/||(110.07 / 714.623)|
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 - (201.707 + 13.744) / 2669.405)||/||(1 - (177.185 + 9.597) / 1795.663)|
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))|
|=||(13.486 / (13.486 + 9.597))||/||(17.74 / (17.74 + 13.744))|
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)|
|=||(180.924 / 714.623)||/||(133.449 / 597.381)|
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)|
|=||((1588.711 + 99.037) / 2669.405)||/||((934.414 + 84.358) / 1795.663)|
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|
|=||(78.26 - 1.133||-||156.255)||/||2669.405|
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.
Prestige Brands Holdings Inc has a M-score of -2.38 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
Prestige Brands Holdings Inc Annual Data
Prestige Brands Holdings Inc Quarterly Data