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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

PIR' s 10-Year Beneish M-Score Range
Min: -4.03   Max: 6.8
Current: -2.69

-4.03
6.8

During the past 13 years, the highest Beneish M-Score of Pier 1 Imports Inc was 6.80. 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 * 1.2107+0.528 * 1.0662+0.404 * 0.8684+0.892 * 1.0168+0.115 * 0.6932
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0165+4.679 * -0.0313-0.327 * 1.6493
=-2.69

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $45 Mil.
Revenue was 484.501 + 418.622 + 419.059 + 515.786 = $1,838 Mil.
Gross Profit was 204.913 + 162.637 + 167.714 + 214.436 = $750 Mil.
Total Current Assets was $667 Mil.
Total Assets was $921 Mil.
Property, Plant and Equipment(Net PPE) was $209 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $561 Mil.
Total Current Liabilities was $322 Mil.
Long-Term Debt was $205 Mil.
Net Income was 17.86 + 9.158 + 15.055 + 42.592 = $85 Mil.
Non Operating Income was 0 + 0 + 0 + 0.505 = $1 Mil.
Cash Flow from Operations was 24.36 + -97.702 + 27.133 + 159.232 = $113 Mil.
Accounts Receivable was $37 Mil.
Revenue was 465.462 + 395.641 + 394.853 + 551.625 = $1,808 Mil.
Gross Profit was 202.23 + 161.299 + 167.597 + 254.978 = $786 Mil.
Total Current Assets was $645 Mil.
Total Assets was $872 Mil.
Property, Plant and Equipment(Net PPE) was $177 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $543 Mil.
Total Current Liabilities was $293 Mil.
Long-Term Debt was $10 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)
=(45.002 / 1837.968) / (36.557 / 1807.581)
=0.02448465 / 0.02022427
=1.2107

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)
=(162.637 / 1807.581) / (204.913 / 1837.968)
=0.43489282 / 0.40789611
=1.0662

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 - (666.761 + 208.722) / 921.383) / (1 - (645.456 + 176.816) / 872.315)
=0.04981642 / 0.05736804
=0.8684

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
=1837.968 / 1807.581
=1.0168

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))
=(44.492 / (44.492 + 176.816)) / (85.261 / (85.261 + 208.722))
=0.20104108 / 0.29002017
=0.6932

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)
=(560.997 / 1837.968) / (542.785 / 1807.581)
=0.30522675 / 0.30028253
=1.0165

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)
=((205.173 + 322.005) / 921.383) / ((9.5 + 293.108) / 872.315)
=0.57215946 / 0.34690221
=1.6493

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
=(84.665 - 0.505 - 113.023) / 921.383
=-0.0313

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 -2.69 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.

Pier 1 Imports Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
DSRI 0.77131.28931.68611.1580.86970.85620.93151.00081.23251.0617
GMI 1.09291.13831.15981.00431.05640.80660.85790.93670.97421.0357
AQI 1.1791.15170.57111.11811.06550.92780.69662.33590.65960.9794
SGI 1.01070.97340.91360.93140.87360.97741.08181.09821.11171.0392
DEPI 0.95230.91610.71560.91640.91760.92711.09011.49131.13121.0171
SGAI 1.03381.09961.20760.80711.0640.95020.94791.00180.97130.9962
LVGI 1.01631.41.2651.09461.13890.6250.82990.93630.97081.1406
TATA 0.00780.0202-0.1359-0.0181-0.1524-0.0639-0.06490.03240.0031-0.0643
M-score -2.54-2.17-2.81-2.44-3.44-2.94-2.90-1.66-2.27-2.72

Pier 1 Imports Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 1.41251.19851.23250.850.91840.94241.06171.03471.07281.2107
GMI 0.94950.96070.97420.97810.98850.99481.03571.05331.06151.0662
AQI 2.12952.08950.65960.56660.5920.64370.97940.95660.97080.8684
SGI 1.09191.09881.11171.11441.11241.10891.03921.0331.02961.0168
DEPI 1.56341.3281.13121.04131.01611.02310.67270.69090.69140.6932
SGAI 0.99130.98690.97130.97150.98030.97830.99620.99581.00151.0165
LVGI 0.88580.880.97081.01810.9521.06691.14061.69011.71861.6493
TATA 0.10750.08940.0047-0.0417-0.0459-0.0917-0.1418-0.1135-0.0766-0.0313
M-score -0.98-1.29-2.27-2.89-2.82-3.03-3.12-3.20-3.00-2.69
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