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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.
Prestige Brands Holdings Inc has a M-score of -2.65 suggests that the company is not a 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 -2.52.
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 * 0.8842||+||0.528 * 0.9554||+||0.404 * 0.9514||+||0.892 * 1.015||+||0.115 * 1.043|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9222||+||4.679 * -0.0135||-||0.327 * 0.951|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $66.2 Mil.|
Revenue was 146.212 + 168.442 + 142.971 + 154.513 = $612.1 Mil.
Gross Profit was 81.809 + 94.719 + 83.483 + 88.07 = $348.1 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 $140.8 Mil.
Total Current Liabilities was $134.1 Mil.
Long-Term Debt was $981.5 Mil.
Net Income was 3.13 + 32.792 + 20.692 + 19.349 = $76.0 Mil.
Non Operating Income was -15.012 + 0 + 0 + -1.443 = $-16.5 Mil.
Cash Flow from Operations was 25.262 + 32.8 + 22.798 + 36.729 = $117.6 Mil.
|Accounts Receivable was $73.8 Mil.
Revenue was 160.232 + 161.855 + 146.997 + 133.996 = $603.1 Mil.
Gross Profit was 84.997 + 90.545 + 83.604 + 68.488 = $327.6 Mil.
Total Current Assets was $151.2 Mil.
Total Assets was $1,731.4 Mil.
Property, Plant and Equipment(Net PPE) was $9.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.0 Mil.
Selling, General & Admin. Expense(SGA) was $150.4 Mil.
Total Current Liabilities was $88.8 Mil.
Long-Term Debt was $1,000.3 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)|
|=||(66.188 / 612.138)||/||(73.752 / 603.08)|
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)|
|=||(94.719 / 603.08)||/||(81.809 / 612.138)|
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 - (244.501 + 10.528) / 1864.846)||/||(1 - (151.222 + 9.19) / 1731.389)|
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))|
|=||(13.001 / (13.001 + 9.19))||/||(13.494 / (13.494 + 10.528))|
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)|
|=||(140.756 / 612.138)||/||(150.366 / 603.08)|
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)|
|=||((981.511 + 134.063) / 1864.846)||/||((1000.3 + 88.75) / 1731.389)|
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|
|=||(75.963 - -16.455||-||117.589)||/||1864.846|
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 -2.65 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