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GuruFocus has detected 4 Warning Signs with Prestige Brands Holdings Inc $PBH.
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Prestige Brands Holdings Inc (NYSE:PBH)
Beneish M-Score
-2.30 (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.

Prestige Brands Holdings Inc has a M-score of -2.30 suggests that the company is not a manipulator.

PBH' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: -2.17
Current: -2.3

-4.25
-2.17

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.


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 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
=-2.30

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

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

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)
=(115.967 / 849.245) / (85.085 / 788.438)
=0.13655306 / 0.1079159
=1.2654

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)
=(459.03 / 788.438) / (488.354 / 849.245)
=0.58220177 / 0.57504489
=1.0124

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 - (291.21 + 12.865) / 2810.852) / (1 - (228.155 + 12.302) / 2640.999)
=0.89182106 / 0.90895226
=0.9812

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
=849.245 / 788.438
=1.0771

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))
=0.65398138 / 0.65932262
=0.9919

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)
=0.22852769 / 0.22765011
=1.0039

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)
=0.55068819 / 0.58074729
=0.9482

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
=(72.241 - -17.519 - 178.247) / 2810.852
=-0.0315

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.


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.

Prestige Brands Holdings Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.81771.22670.87770.88061.26061.0350.86280.9051.12230.9743
GMI 1.02051.00660.9840.99991.03270.9850.930.98680.98810.9809
AQI 1.00470.99720.94750.98561.04711.02090.98290.99561.02510.9911
SGI 1.0741.0250.92820.96521.15011.31081.40590.96331.19631.1282
DEPI 0.9850.99641.01781.00011.01870.98131.55840.97941.03690.9333
SGAI 1.05661.0671.13580.96841.13311.02340.86620.99941.13330.8976
LVGI 0.92160.9021.20180.8671.15711.31940.90830.92461.10770.9346
TATA -0.0337-0.0107-0.3163-0.0312-0.0541-0.017-0.0406-0.0115-0.03-0.0192
M-score -2.71-2.28-4.25-2.72-2.40-2.36-2.36-2.64-2.38-2.46

Prestige Brands Holdings Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.22031.16031.12231.16240.72670.85070.97430.96560.97821.2654
GMI 0.99671.00380.98810.97060.96760.96470.98090.99151.00091.0124
AQI 1.02361.0661.02511.0121.00320.98780.99110.97630.97780.9812
SGI 0.99061.10291.19631.26721.2781.1811.12821.08231.05961.0771
DEPI 1.02791.04411.03690.90710.82910.82270.93330.97970.97980.9919
SGAI 1.18251.14021.13331.07020.91240.90210.89760.91160.98711.0039
LVGI 1.11641.07821.10771.07930.90360.90040.93460.95540.94520.9482
TATA -0.0156-0.0232-0.03-0.0315-0.0333-0.0297-0.0192-0.0333-0.0346-0.0315
M-score -2.42-2.37-2.38-2.30-2.63-2.59-2.46-2.58-2.60-2.30
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