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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 -2.17. The lowest was -4.25. And the median was -2.50.
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 * 1.2654||+||0.528 * 1.0124||+||0.404 * 0.9812||+||0.892 * 1.0771||+||0.115 * 0.9919|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0039||+||4.679 * -0.0315||-||0.327 * 0.9482|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $116.0 Mil.|
Revenue was 216.763 + 215.052 + 209.575 + 207.855 = $849.2 Mil.
Gross Profit was 124.547 + 123.965 + 121.591 + 118.251 = $488.4 Mil.
Total Current Assets was $291.2 Mil.
Total Assets was $2,810.9 Mil.
Property, Plant and Equipment(Net PPE) was $12.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.9 Mil.
Selling, General & Admin. Expense(SGA) was $194.1 Mil.
Total Current Liabilities was $132.3 Mil.
Long-Term Debt was $1,415.6 Mil.
Net Income was 31.641 + 32.195 + -5.531 + 13.936 = $72.2 Mil.
Non Operating Income was 0 + 0 + 0 + -17.519 = $-17.5 Mil.
Cash Flow from Operations was 40.066 + 49.531 + 50.751 + 37.899 = $178.2 Mil.
|Accounts Receivable was $85.1 Mil.
Revenue was 200.195 + 206.065 + 192.132 + 190.046 = $788.4 Mil.
Gross Profit was 116.784 + 119.94 + 112.236 + 110.07 = $459.0 Mil.
Total Current Assets was $228.2 Mil.
Total Assets was $2,641.0 Mil.
Property, Plant and Equipment(Net PPE) was $12.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.3 Mil.
Selling, General & Admin. Expense(SGA) was $179.5 Mil.
Total Current Liabilities was $86.7 Mil.
Long-Term Debt was $1,447.0 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)|
|=||(115.967 / 849.245)||/||(85.085 / 788.438)|
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)|
|=||(459.03 / 788.438)||/||(488.354 / 849.245)|
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 - (291.21 + 12.865) / 2810.852)||/||(1 - (228.155 + 12.302) / 2640.999)|
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))|
|=||(23.251 / (23.251 + 12.302))||/||(24.898 / (24.898 + 12.865))|
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)|
|=||(194.076 / 849.245)||/||(179.488 / 788.438)|
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)|
|=||((1415.579 + 132.324) / 2810.852)||/||((1447.032 + 86.721) / 2640.999)|
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|
|=||(72.241 - -17.519||-||178.247)||/||2810.852|
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 -2.30 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