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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Beneish M-Score
-2.51 (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.

Pep Boys - Manny Moe & Jack has a M-score of -2.49 suggests that the company is not a manipulator.

PBY' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -1.9
Current: -2.51

-2.94
-1.9

During the past 13 years, the highest Beneish M-Score of Pep Boys - Manny Moe & Jack was -1.90. The lowest was -2.94. And the median was -2.49.


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 Pep Boys - Manny Moe & Jack 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 * 1.2224+0.528 * 1.034+0.404 * 0.8419+0.892 * 1.0087+0.115 * 1.0081
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0326+4.679 * -0.0363-0.327 * 1.0114
=-2.49

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $31 Mil.
Revenue was 502.424 + 517.584 + 525.773 + 538.821 = $2,085 Mil.
Gross Profit was 99.684 + 118.334 + 124.297 + 133.126 = $475 Mil.
Total Current Assets was $813 Mil.
Total Assets was $1,542 Mil.
Property, Plant and Equipment(Net PPE) was $604 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $484 Mil.
Total Current Liabilities was $657 Mil.
Long-Term Debt was $211 Mil.
Net Income was -26.668 + -1.964 + -0.273 + 1.608 = $-27 Mil.
Non Operating Income was 0.013 + 0.418 + 0.316 + 0.441 = $1 Mil.
Cash Flow from Operations was 15.819 + -3.933 + 4.104 + 11.454 = $27 Mil.
Accounts Receivable was $25 Mil.
Revenue was 495.733 + 507.042 + 527.619 + 536.173 = $2,067 Mil.
Gross Profit was 104.016 + 122.812 + 138.708 + 121.84 = $487 Mil.
Total Current Assets was $826 Mil.
Total Assets was $1,605 Mil.
Property, Plant and Equipment(Net PPE) was $626 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $465 Mil.
Total Current Liabilities was $695 Mil.
Long-Term Debt was $200 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)
=(31.013 / 2084.602) / (25.152 / 2066.567)
=0.01487718 / 0.01217091
=1.2224

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)
=(118.334 / 2066.567) / (99.684 / 2084.602)
=0.23583847 / 0.22807279
=1.034

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 - (812.6 + 604.38) / 1541.741) / (1 - (825.637 + 625.525) / 1605.481)
=0.08092215 / 0.0961201
=0.8419

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
=2084.602 / 2066.567
=1.0087

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))
=(78.439 / (78.439 + 625.525)) / (75.099 / (75.099 + 604.38))
=0.11142473 / 0.11052439
=1.0081

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)
=(484.183 / 2084.602) / (464.852 / 2066.567)
=0.2322664 / 0.22493923
=1.0326

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)
=((211 + 657.428) / 1541.741) / ((199.5 + 694.608) / 1605.481)
=0.56327749 / 0.55690974
=1.0114

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
=(-27.297 - 1.188 - 27.444) / 1541.741
=-0.0363

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.

Pep Boys - Manny Moe & Jack has a M-score of -2.49 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 own currency.

Pep Boys - Manny Moe & Jack Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 1.20950.79931.04481.08580.80420.8171.2720.91451.06481.2224
GMI 1.18150.9011.10970.9420.94910.96851.06381.05030.99681.034
AQI 0.74852.06610.64171.84440.82161.15921.58080.88631.15880.8419
SGI 0.97191.01580.95290.90160.99131.04071.03771.01310.98841.0087
DEPI 0.96440.87430.9571.03290.99130.94640.93721.11760.82191.0081
SGAI 0.97681.03520.99561.03780.89490.98770.96751.06970.97741.0326
LVGI 1.04011.00650.93470.95010.95171.00841.01590.98861.00921.0114
TATA -0.0043-0.0628-0.07210.0046-0.0443-0.0534-0.0288-0.0217-0.0338-0.0363
M-score -2.35-2.59-2.89-2.14-2.94-2.82-2.07-2.66-2.55-2.49

Pep Boys - Manny Moe & Jack Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 1.0570.91451.10390.89650.97161.06481.10341.1191.28231.2224
GMI 1.08761.05031.04751.02020.98920.99680.95871.00181.03151.034
AQI 0.9470.88630.92871.0841.06091.15881.17221.19811.07280.8419
SGI 1.01451.01311.01331.01271.01770.98840.98430.98250.98871.0087
DEPI 1.08061.11761.14931.19340.87580.82190.82810.81351.00321.0081
SGAI 1.03051.06971.04081.05351.04930.97741.00340.99080.98371.0326
LVGI 0.98680.98860.96680.97991.0141.00921.00821.01551.01071.0114
TATA -0.0791-0.0217-0.00210.0250.028-0.0338-0.0368-0.0294-0.0087-0.0363
M-score -2.75-2.66-2.37-2.38-2.37-2.55-2.55-2.47-2.23-2.49
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