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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Beneish M-Score
-2.53 (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 -2.53 suggests that the company is not a manipulator.

PBY' s 10-Year Beneish M-Score Range
Min: -3.57   Max: 0.62
Current: -2.53

-3.57
0.62

During the past 13 years, the highest Beneish M-Score of Pep Boys - Manny Moe & Jack was 0.62. The lowest was -3.57. 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 * 1.1034+0.528 * 0.9587+0.404 * 1.1722+0.892 * 0.9843+0.115 * 0.9751
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0034+4.679 * -0.0368-0.327 * 1.0082
=-2.53

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $27 Mil.
Revenue was 538.821 + 495.733 + 507.042 + 527.619 = $2,069 Mil.
Gross Profit was 133.126 + 104.016 + 122.812 + 138.708 = $499 Mil.
Total Current Assets was $817 Mil.
Total Assets was $1,593 Mil.
Property, Plant and Equipment(Net PPE) was $623 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $474 Mil.
Total Current Liabilities was $680 Mil.
Long-Term Debt was $203 Mil.
Net Income was 1.608 + -3.331 + 0.964 + 5.368 = $5 Mil.
Non Operating Income was 0.441 + 0.422 + 0.524 + 0.466 = $2 Mil.
Cash Flow from Operations was 11.454 + -3.45 + 31.656 + 21.763 = $61 Mil.
Accounts Receivable was $25 Mil.
Revenue was 536.173 + 530.847 + 509.608 + 525.671 = $2,102 Mil.
Gross Profit was 121.84 + 117.207 + 116.04 + 130.601 = $486 Mil.
Total Current Assets was $818 Mil.
Total Assets was $1,596 Mil.
Property, Plant and Equipment(Net PPE) was $648 Mil.
Depreciation, Depletion and Amortization(DDA) was $64 Mil.
Selling, General & Admin. Expense(SGA) was $480 Mil.
Total Current Liabilities was $680 Mil.
Long-Term Debt was $198 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)
=(27.385 / 2069.215) / (25.215 / 2102.299)
=0.01323449 / 0.01199401
=1.1034

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)
=(104.016 / 2102.299) / (133.126 / 2069.215)
=0.23102708 / 0.24099091
=0.9587

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 - (817.246 + 622.866) / 1592.951) / (1 - (817.662 + 647.636) / 1595.928)
=0.09594708 / 0.08185206
=1.1722

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
=2069.215 / 2102.299
=0.9843

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))
=(64.021 / (64.021 + 647.636)) / (63.303 / (63.303 + 622.866))
=0.08996047 / 0.0922557
=0.9751

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)
=(473.72 / 2069.215) / (479.662 / 2102.299)
=0.22893706 / 0.22816069
=1.0034

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)
=((202.5 + 680.042) / 1592.951) / ((197.5 + 679.513) / 1595.928)
=0.5540296 / 0.54953168
=1.0082

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
=(4.609 - 1.853 - 61.423) / 1592.951
=-0.0368

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 -2.53 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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 0.9514.04210.7990.31281.08580.80420.8174.19990.97041.0631
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 -2.440.25-2.59-3.56-2.14-2.94-2.820.62-2.61-2.53

Pep Boys - Manny Moe & Jack Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 4.19991.11231.24471.0570.97041.10390.89650.97161.06311.1034
GMI 1.06381.07841.08191.08761.05031.04751.02020.98920.99680.9587
AQI 1.58081.45130.78630.9470.88630.92871.0841.06091.15881.1722
SGI 1.03771.04141.03381.01451.01311.01331.01271.01770.98840.9843
DEPI 0.93720.95240.96671.08061.11761.14931.09120.98620.96170.9751
SGAI 0.96750.99361.00281.03051.06971.04081.05351.04930.97741.0034
LVGI 1.01591.03381.02880.98680.98860.96680.97991.0141.00921.0082
TATA -0.0288-0.0345-0.0701-0.0791-0.0217-0.00210.0250.028-0.0338-0.0368
M-score 0.62-2.29-2.61-2.75-2.61-2.37-2.39-2.36-2.53-2.53
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