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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

PBY' s 10-Year Beneish M-Score Range
Min: -3.05   Max: -1.57
Current: -2.2

-3.05
-1.57

During the past 13 years, the highest Beneish M-Score of Pep Boys - Manny Moe & Jack was -1.57. The lowest was -3.05. And the median was -2.58.


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 * 1.2823+0.528 * 1.0315+0.404 * 1.0728+0.892 * 0.9887+0.115 * 1.1869
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9837+4.679 * -0.0087-0.327 * 1.0107
=-2.20

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $32 Mil.
Revenue was 517.584 + 525.773 + 538.821 + 495.733 = $2,078 Mil.
Gross Profit was 118.334 + 124.297 + 133.126 + 104.016 = $480 Mil.
Total Current Assets was $807 Mil.
Total Assets was $1,572 Mil.
Property, Plant and Equipment(Net PPE) was $614 Mil.
Depreciation, Depletion and Amortization(DDA) was $61 Mil.
Selling, General & Admin. Expense(SGA) was $476 Mil.
Total Current Liabilities was $642 Mil.
Long-Term Debt was $230 Mil.
Net Income was -1.964 + -0.273 + 1.608 + -3.331 = $-4 Mil.
Non Operating Income was 0.418 + 0.316 + 0.441 + 0.422 = $2 Mil.
Cash Flow from Operations was -3.933 + 4.104 + 11.454 + -3.45 = $8 Mil.
Accounts Receivable was $25 Mil.
Revenue was 507.042 + 527.619 + 536.173 + 530.847 = $2,102 Mil.
Gross Profit was 122.812 + 138.708 + 121.84 + 117.207 = $501 Mil.
Total Current Assets was $815 Mil.
Total Assets was $1,589 Mil.
Property, Plant and Equipment(Net PPE) was $632 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $489 Mil.
Total Current Liabilities was $675 Mil.
Long-Term Debt was $197 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)
=(31.622 / 2077.911) / (24.942 / 2101.681)
=0.01521817 / 0.01186764
=1.2823

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)
=(124.297 / 2101.681) / (118.334 / 2077.911)
=0.23817459 / 0.23089199
=1.0315

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 - (806.91 + 614.326) / 1572.401) / (1 - (815.191 + 631.639) / 1589.247)
=0.09613642 / 0.08961288
=1.0728

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
=2077.911 / 2101.681
=0.9887

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))
=(76.373 / (76.373 + 631.639)) / (61.412 / (61.412 + 614.326))
=0.10786964 / 0.09088138
=1.1869

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)
=(475.962 / 2077.911) / (489.39 / 2101.681)
=0.22905793 / 0.23285646
=0.9837

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)
=((229.5 + 642.251) / 1572.401) / ((196.5 + 675.225) / 1589.247)
=0.55440756 / 0.54851449
=1.0107

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
=(-3.96 - 1.597 - 8.175) / 1572.401
=-0.0087

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 -2.20 signals that the company is likely to 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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 0.9511.20950.79931.04481.08580.80420.8171.2720.91451.0648
GMI 1.01271.18150.9011.10970.9420.94910.96851.06381.05030.9968
AQI 1.17470.74852.06610.64171.84440.82161.15921.58080.88631.1588
SGI 1.06640.97191.01580.95290.90160.99131.04071.03771.01310.9884
DEPI 1.04220.96440.87430.9571.03290.99130.94640.93721.11760.9617
SGAI 0.90160.97681.03520.99561.03780.89490.98770.96751.06970.9774
LVGI 0.96441.04011.00650.93470.95010.95171.00841.01590.98861.0092
TATA -0.019-0.0043-0.0628-0.07210.0046-0.0443-0.0534-0.0288-0.0217-0.0338
M-score -2.44-2.35-2.59-2.89-2.14-2.94-2.82-2.07-2.66-2.53

Pep Boys - Manny Moe & Jack Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 1.24471.0570.91451.10390.89650.97161.06481.10341.1191.2823
GMI 1.08191.08761.05031.04751.02020.98920.99680.95871.00181.0315
AQI 0.78630.9470.88630.92871.0841.06091.15881.17221.19811.0728
SGI 1.03381.01451.01311.01331.01271.01770.98840.98430.98250.9887
DEPI 0.96671.08061.11761.14931.19340.87580.96170.97510.96121.1869
SGAI 1.00281.03051.06971.04081.05351.04930.97741.00340.99080.9837
LVGI 1.02880.98680.98860.96680.97991.0141.00921.00821.01551.0107
TATA -0.0701-0.0791-0.0217-0.00210.0250.028-0.0338-0.0368-0.0294-0.0087
M-score -2.61-2.75-2.66-2.37-2.38-2.37-2.53-2.53-2.45-2.20
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