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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-3.36 (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.

Pier 1 Imports Inc has a M-score of -3.23 suggests that the company is not a manipulator.

PIR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.03   Max: 6.79
Current: -3.36

-4.03
6.79

During the past 13 years, the highest Beneish M-Score of Pier 1 Imports Inc was 6.79. The lowest was -4.03. And the median was -2.79.


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 Pier 1 Imports 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 * 0.998+0.528 * 1.0985+0.404 * 1.0209+0.892 * 0.9902+0.115 * 0.9145
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.978+4.679 * -0.1685-0.327 * 1.0312
=-3.23

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $26 Mil.
Revenue was 418.37 + 557.723 + 472.547 + 434.992 = $1,884 Mil.
Gross Profit was 148.967 + 212.292 + 178.493 + 154.554 = $694 Mil.
Total Current Assets was $610 Mil.
Total Assets was $846 Mil.
Property, Plant and Equipment(Net PPE) was $199 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $588 Mil.
Total Current Liabilities was $288 Mil.
Long-Term Debt was $200 Mil.
Net Income was -6.02 + 18.675 + 10.919 + 3.166 = $27 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 33.523 + 122.183 + 74.21 + -60.685 = $169 Mil.
Accounts Receivable was $26 Mil.
Revenue was 436.866 + 562.375 + 484.501 + 418.622 = $1,902 Mil.
Gross Profit was 169.539 + 233.217 + 204.913 + 162.637 = $770 Mil.
Total Current Assets was $672 Mil.
Total Assets was $921 Mil.
Property, Plant and Equipment(Net PPE) was $210 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $607 Mil.
Total Current Liabilities was $315 Mil.
Long-Term Debt was $201 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)
=(25.631 / 1883.632) / (25.938 / 1902.364)
=0.01360722 / 0.01363461
=0.998

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)
=(770.306 / 1902.364) / (694.306 / 1883.632)
=0.4049204 / 0.3685996
=1.0985

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 - (609.755 + 199.331) / 845.824) / (1 - (672.12 + 209.912) / 921.227)
=0.04343457 / 0.04254652
=1.0209

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
=1883.632 / 1902.364
=0.9902

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))
=(54.329 / (54.329 + 209.912)) / (57.809 / (57.809 + 199.331))
=0.20560398 / 0.22481528
=0.9145

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)
=(587.848 / 1883.632) / (607.027 / 1902.364)
=0.31208219 / 0.31909088
=0.978

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)
=((199.962 + 288.388) / 845.824) / ((201.134 + 314.683) / 921.227)
=0.57736598 / 0.55992388
=1.0312

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
=(26.74 - 0 - 169.231) / 845.824
=-0.1685

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.

Pier 1 Imports Inc has a M-score of -3.23 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.

Pier 1 Imports Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
DSRI 1.68611.1580.86970.85620.93151.00081.23251.06171.12310.7668
GMI 1.15981.00431.05640.80660.85790.93670.97421.03571.0321.0945
AQI 0.57111.11811.06550.92780.69662.33590.65960.97940.79471.0341
SGI 0.91360.93140.87360.97741.08181.09821.11171.03921.06371.0041
DEPI 0.71560.91640.91760.92711.09011.49131.13121.01711.06470.8859
SGAI 1.20760.80711.0640.95020.94791.00180.97130.99621.05290.969
LVGI 1.2651.09461.13890.6250.82990.93630.97081.14061.57461.0108
TATA -0.1359-0.0181-0.1524-0.0639-0.06980.03240.0063-0.06650.0104-0.1519
M-score -2.81-2.44-3.44-2.94-2.92-1.66-2.26-2.73-2.52-3.35

Pier 1 Imports Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 1.03471.07281.21071.12311.1220.98880.87420.76280.9980.8396
GMI 1.05331.06151.06621.0321.02541.03381.0571.0851.09851.0758
AQI 0.95660.97080.86840.79470.86950.89130.9481.03411.02090.9314
SGI 1.0331.02961.01681.06371.05931.05491.03741.00930.99020.9665
DEPI 1.03511.02831.01331.00850.97610.94040.96360.93520.91450.8947
SGAI 0.99581.00151.01651.05291.06681.0451.01520.98040.9781.0086
LVGI 1.69011.71861.64931.57461.03421.07821.0461.01081.03120.9777
TATA -0.0491-0.00750.03510.01040.0001-0.0482-0.1133-0.1519-0.1685-0.1512
M-score -2.86-2.63-2.34-2.52-2.38-2.73-3.11-3.35-3.23-3.36
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