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GuruFocus has detected 1 Warning Sign with Perry Ellis International Inc $PERY.
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Perry Ellis International Inc (NAS:PERY)
Beneish M-Score
-2.98 (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.

Perry Ellis International Inc has a M-score of -2.98 suggests that the company is not a manipulator.

PERY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.37   Max: 3.25
Current: -2.98

-3.37
3.25

During the past 13 years, the highest Beneish M-Score of Perry Ellis International Inc was 3.25. The lowest was -3.37. 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 Perry Ellis International 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 * 1.0863+0.528 * 0.9474+0.404 * 0.9739+0.892 * 0.965+0.115 * 0.9225
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1056+4.679 * -0.1113-0.327 * 0.8921
=-2.98

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $128.0 Mil.
Revenue was 193.959 + 201.653 + 261.294 + 214.363 = $871.3 Mil.
Gross Profit was 71.103 + 73.831 + 95.084 + 79.73 = $319.7 Mil.
Total Current Assets was $293.8 Mil.
Total Assets was $547.5 Mil.
Property, Plant and Equipment(Net PPE) was $63.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.7 Mil.
Selling, General & Admin. Expense(SGA) was $288.6 Mil.
Total Current Liabilities was $80.3 Mil.
Long-Term Debt was $108.1 Mil.
Net Income was -5.165 + -3.565 + 14.25 + -17.695 = $-12.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 2.307 + 73.934 + -39 + 11.527 = $48.8 Mil.
Accounts Receivable was $122.1 Mil.
Revenue was 205.439 + 213.299 + 266.414 + 217.686 = $902.8 Mil.
Gross Profit was 73.295 + 75.942 + 90.1 + 74.568 = $313.9 Mil.
Total Current Assets was $323.4 Mil.
Total Assets was $606.7 Mil.
Property, Plant and Equipment(Net PPE) was $67.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.0 Mil.
Selling, General & Admin. Expense(SGA) was $270.5 Mil.
Total Current Liabilities was $101.9 Mil.
Long-Term Debt was $132.1 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)
=(127.97 / 871.269) / (122.068 / 902.838)
=0.14687772 / 0.13520477
=1.0863

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)
=(313.905 / 902.838) / (319.748 / 871.269)
=0.34768696 / 0.36699114
=0.9474

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 - (293.792 + 63.682) / 547.538) / (1 - (323.39 + 67.04) / 606.664)
=0.34712477 / 0.35643124
=0.9739

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
=871.269 / 902.838
=0.965

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))
=(14.024 / (14.024 + 67.04)) / (14.699 / (14.699 + 63.682))
=0.17299911 / 0.18753269
=0.9225

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)
=(288.566 / 871.269) / (270.469 / 902.838)
=0.33120196 / 0.29957645
=1.1056

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)
=((108.142 + 80.289) / 547.538) / ((132.138 + 101.905) / 606.664)
=0.34414232 / 0.38578686
=0.8921

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
=(-12.175 - 0 - 48.768) / 547.538
=-0.1113

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.

Perry Ellis International Inc has a M-score of -2.98 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 local exchange's currency.

Perry Ellis International Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.05640.84261.04991.10550.88340.90261.21650.84620.95730.9487
GMI 0.92990.98451.03280.98960.92411.08261.00910.98570.97490.9598
AQI 0.99860.98021.01171.061.06590.94130.96060.8921.0270.9531
SGI 0.9771.0410.98550.88591.04781.24080.98870.94090.97561.0107
DEPI 0.9180.97030.87190.94071.01050.93370.89171.1931.08360.911
SGAI 1.07421.01211.11330.95491.0480.91071.07341.09851.01021.0155
LVGI 0.92330.83161.14420.86541.11290.85661.05661.02851.04340.9349
TATA -0.0105-0.1077-0.0085-0.13410.00560.0361-0.0815-0.0325-0.1348-0.0519
M-score -2.53-3.06-2.55-3.05-2.58-2.11-2.73-2.88-3.18-2.79

Perry Ellis International Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 0.88590.92460.95731.10191.05060.84870.94870.96841.17251.0863
GMI 0.970.96240.97490.97910.98740.97980.95980.93770.9380.9474
AQI 0.90330.91281.0271.06661.07081.05280.95310.92260.96520.9739
SGI 0.92820.93070.97560.9911.01091.01631.01070.99480.97130.965
DEPI 1.0211.06961.08361.07171.03990.97780.9110.93590.9220.9225
SGAI 1.09141.05671.01020.99760.98190.99251.01551.03331.06961.1056
LVGI 1.00331.05661.04340.98520.96060.95360.93490.96180.89820.8921
TATA -0.0864-0.096-0.1348-0.1483-0.0956-0.111-0.0519-0.0448-0.0882-0.1113
M-score -3.12-3.14-3.18-3.06-2.83-3.10-2.79-2.79-2.79-2.98
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