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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 -2.16. The lowest was -4.19. And the median was -2.47.
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 * 1.1591||+||0.528 * 1.003||+||0.404 * 1.066||+||0.892 * 1.1039||+||0.115 * 1.0441|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1399||+||4.679 * -0.0232||-||0.327 * 1.0782|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $84.7 Mil.|
Revenue was 197.606 + 181.269 + 145.702 + 147.553 = $672.1 Mil.
Gross Profit was 111.745 + 102.542 + 81.866 + 83.337 = $379.5 Mil.
Total Current Assets was $200.8 Mil.
Total Assets was $2,680.6 Mil.
Property, Plant and Equipment(Net PPE) was $13.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.2 Mil.
Selling, General & Admin. Expense(SGA) was $173.0 Mil.
Total Current Liabilities was $91.0 Mil.
Long-Term Debt was $1,638.0 Mil.
Net Income was 21.293 + 16.463 + 16.732 + 16.001 = $70.5 Mil.
Non Operating Income was 1.133 + 0 + 0 + -3.274 = $-2.1 Mil.
Cash Flow from Operations was 47.084 + 27.387 + 29.671 + 30.722 = $134.9 Mil.
|Accounts Receivable was $66.2 Mil.
Revenue was 144.871 + 166.945 + 142.512 + 154.513 = $608.8 Mil.
Gross Profit was 80.468 + 93.222 + 83.024 + 88.07 = $344.8 Mil.
Total Current Assets was $244.5 Mil.
Total Assets was $1,864.8 Mil.
Property, Plant and Equipment(Net PPE) was $10.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $137.5 Mil.
Total Current Liabilities was $134.1 Mil.
Long-Term Debt was $981.5 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)|
|=||(84.694 / 672.13)||/||(66.188 / 608.841)|
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)|
|=||(102.542 / 608.841)||/||(111.745 / 672.13)|
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 - (200.762 + 13.089) / 2680.596)||/||(1 - (244.501 + 10.528) / 1864.846)|
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))|
|=||(13.494 / (13.494 + 10.528))||/||(15.244 / (15.244 + 13.089))|
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)|
|=||(172.974 / 672.13)||/||(137.459 / 608.841)|
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)|
|=||((1637.961 + 91.034) / 2680.596)||/||((981.511 + 134.063) / 1864.846)|
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|
|=||(70.489 - -2.141||-||134.864)||/||2680.596|
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 -2.37 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