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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

PIR' s 10-Year Beneish M-Score Range
Min: -4.03   Max: 8.63
Current: -2.86

-4.03
8.63

During the past 13 years, the highest Beneish M-Score of Pier 1 Imports Inc was 8.63. The lowest was -4.03. And the median was -2.84.


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 * 1.0347+0.528 * 1.0533+0.404 * 0.9566+0.892 * 1.033+0.115 * 1.0351
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9958+4.679 * -0.0491-0.327 * 1.6901
=-2.86

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $22 Mil.
Revenue was 419.059 + 515.786 + 465.462 + 395.641 = $1,796 Mil.
Gross Profit was 167.714 + 214.436 + 202.23 + 161.299 = $746 Mil.
Total Current Assets was $712 Mil.
Total Assets was $946 Mil.
Property, Plant and Equipment(Net PPE) was $188 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $537 Mil.
Total Current Liabilities was $306 Mil.
Long-Term Debt was $206 Mil.
Net Income was 15.055 + 42.592 + 26.758 + 17.834 = $102 Mil.
Non Operating Income was 0 + 0.505 + 0.592 + 0.272 = $1 Mil.
Cash Flow from Operations was 27.133 + 98.07 + 71.603 + -49.479 = $147 Mil.
Accounts Receivable was $20 Mil.
Revenue was 394.853 + 551.625 + 424.527 + 367.615 = $1,739 Mil.
Gross Profit was 167.597 + 254.978 + 186.259 + 151.549 = $760 Mil.
Total Current Assets was $696 Mil.
Total Assets was $896 Mil.
Property, Plant and Equipment(Net PPE) was $154 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $522 Mil.
Total Current Liabilities was $277 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)
=(21.824 / 1795.948) / (20.418 / 1738.62)
=0.0121518 / 0.0117438
=1.0347

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)
=(214.436 / 1738.62) / (167.714 / 1795.948)
=0.43734859 / 0.41520077
=1.0533

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 - (711.593 + 187.804) / 945.673) / (1 - (696.09 + 154.026) / 895.946)
=0.04893446 / 0.05115264
=0.9566

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
=1795.948 / 1738.62
=1.033

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))
=(40.388 / (40.388 + 154.026)) / (47.155 / (47.155 + 187.804))
=0.20774224 / 0.20069459
=1.0351

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)
=(537.186 / 1795.948) / (522.224 / 1738.62)
=0.29911 / 0.30036696
=0.9958

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)
=((206.026 + 305.962) / 945.673) / ((9.5 + 277.499) / 895.946)
=0.54140067 / 0.32033069
=1.6901

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
=(102.239 - 1.369 - 147.327) / 945.673
=-0.0491

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 -2.86 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 0.79741.8450.75360.69960.61410.7920.96040.94271.22251.0617
GMI 1.09181.13151.15981.00431.05640.80660.85790.93670.97421.0357
AQI 1.19071.14030.57111.11811.06550.92780.69662.33590.65960.9794
SGI 1.01580.93620.91360.93140.87360.97741.08181.09821.11171.0392
DEPI 0.99440.87730.99550.65880.91760.92711.09011.49131.13121.0171
SGAI 1.03621.09631.20760.80711.0640.95020.94791.00180.97130.9962
LVGI 1.00791.41171.2651.09461.13890.6250.82990.93630.97081.1406
TATA -0.0770.0202-0.1359-0.0181-0.1524-0.0639-0.06980.03240.0063-0.0665
M-score -2.90-1.70-3.63-2.89-3.67-3.00-2.89-1.71-2.27-2.73

Pier 1 Imports Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
DSRI 0.94271.21041.39181.19251.22250.850.91840.94241.06171.0347
GMI 0.93670.94350.94950.96070.97420.97810.98850.99481.03571.0533
AQI 2.33592.30822.12952.08950.65960.56660.5920.64370.97940.9566
SGI 1.09821.0951.09191.09881.11171.11441.11241.10891.03921.033
DEPI 1.49131.60671.56341.3281.13121.04131.01611.02311.01711.0351
SGAI 1.00181.00120.99130.98690.97130.97150.98030.97830.99620.9958
LVGI 0.93630.94950.88580.880.97081.01810.9521.06691.14061.6901
TATA 0.03240.06040.10750.08970.0058-0.0407-0.0452-0.0913-0.066-0.0491
M-score -1.71-1.33-1.00-1.30-2.27-2.89-2.82-3.03-2.73-2.86
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