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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Beneish M-Score
-2.45 (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 -2.45 suggests that the company is not a manipulator.

PBY' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.57
Current: -2.45

-3.29
-1.57

During the past 13 years, the highest Beneish M-Score of Pep Boys - Manny Moe & Jack was -1.57. The lowest was -3.29. And the median was -2.57.


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 * 1.119+0.528 * 1.0018+0.404 * 1.1981+0.892 * 0.9825+0.115 * 0.9612
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9908+4.679 * -0.0294-0.327 * 1.0155
=-2.45

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $28 Mil.
Revenue was 525.773 + 538.821 + 495.733 + 507.042 = $2,067 Mil.
Gross Profit was 124.297 + 133.126 + 104.016 + 122.812 = $484 Mil.
Total Current Assets was $806 Mil.
Total Assets was $1,581 Mil.
Property, Plant and Equipment(Net PPE) was $623 Mil.
Depreciation, Depletion and Amortization(DDA) was $62 Mil.
Selling, General & Admin. Expense(SGA) was $473 Mil.
Total Current Liabilities was $654 Mil.
Long-Term Debt was $220 Mil.
Net Income was -0.273 + 1.608 + -3.331 + 0.964 = $-1 Mil.
Non Operating Income was 0.316 + 0.441 + 0.422 + 0.524 = $2 Mil.
Cash Flow from Operations was 4.104 + 11.454 + -3.45 + 31.656 = $44 Mil.
Accounts Receivable was $25 Mil.
Revenue was 527.619 + 536.173 + 530.847 + 509.608 = $2,104 Mil.
Gross Profit was 138.708 + 121.84 + 117.207 + 116.04 = $494 Mil.
Total Current Assets was $818 Mil.
Total Assets was $1,583 Mil.
Property, Plant and Equipment(Net PPE) was $639 Mil.
Depreciation, Depletion and Amortization(DDA) was $61 Mil.
Selling, General & Admin. Expense(SGA) was $486 Mil.
Total Current Liabilities was $665 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)
=(27.908 / 2067.369) / (25.386 / 2104.247)
=0.01349928 / 0.01206417
=1.119

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)
=(133.126 / 2104.247) / (124.297 / 2067.369)
=0.23466589 / 0.2342354
=1.0018

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 - (806.011 + 623.285) / 1580.732) / (1 - (817.998 + 638.727) / 1583.329)
=0.09580119 / 0.07996064
=1.1981

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
=2067.369 / 2104.247
=0.9825

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))
=(60.832 / (60.832 + 638.727)) / (61.996 / (61.996 + 623.285))
=0.08695764 / 0.090468
=0.9612

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)
=(473.415 / 2067.369) / (486.314 / 2104.247)
=0.22899395 / 0.2311107
=0.9908

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)
=((220 + 653.821) / 1580.732) / ((197 + 664.857) / 1583.329)
=0.55279516 / 0.54433223
=1.0155

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
=(-1.032 - 1.703 - 43.764) / 1580.732
=-0.0294

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 -2.45 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 0.9511.20950.79931.04481.08580.80420.8171.2720.91451.0648
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

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.11231.24471.0570.91451.10390.89650.97161.06481.10341.119
GMI 1.07841.08191.08761.05031.04751.02020.98920.99680.95871.0018
AQI 1.45130.78630.9470.88630.92871.0841.06091.15881.17221.1981
SGI 1.04141.03381.01451.01311.01331.01271.01770.98840.98430.9825
DEPI 0.95240.96671.08061.11761.14931.19340.98620.96170.97510.9612
SGAI 0.99361.00281.03051.06971.04081.05351.04930.97741.00340.9908
LVGI 1.03381.02880.98680.98860.96680.97991.0141.00921.00821.0155
TATA -0.0345-0.0701-0.0791-0.0217-0.00210.0250.028-0.0338-0.0368-0.0294
M-score -2.29-2.61-2.75-2.66-2.37-2.38-2.36-2.53-2.53-2.45
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