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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-3.35 (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 -3.35 suggests that the company is not a manipulator.

PIR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.61   Max: -1.33
Current: -3.35

-3.61
-1.33

During the past 13 years, the highest Beneish M-Score of Pier 1 Imports Inc was -1.33. The lowest was -3.61. And the median was -2.63.


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 * 0.7668+0.528 * 1.0945+0.404 * 1.0341+0.892 * 1.0041+0.115 * 0.8859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.969+4.679 * -0.1519-0.327 * 1.0108
=-3.35

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $23 Mil.
Revenue was 557.723 + 472.547 + 429.956 + 432.004 = $1,892 Mil.
Gross Profit was 212.292 + 178.493 + 149.518 + 164.677 = $705 Mil.
Total Current Assets was $575 Mil.
Total Assets was $819 Mil.
Property, Plant and Equipment(Net PPE) was $208 Mil.
Depreciation, Depletion and Amortization(DDA) was $56 Mil.
Selling, General & Admin. Expense(SGA) was $579 Mil.
Total Current Liabilities was $247 Mil.
Long-Term Debt was $200 Mil.
Net Income was 18.675 + 10.919 + 3.166 + 6.874 = $40 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 122.183 + 74.21 + -60.685 + 28.339 = $164 Mil.
Accounts Receivable was $29 Mil.
Revenue was 562.375 + 484.501 + 418.622 + 419.059 = $1,885 Mil.
Gross Profit was 233.217 + 204.913 + 162.637 + 167.714 = $768 Mil.
Total Current Assets was $654 Mil.
Total Assets was $907 Mil.
Property, Plant and Equipment(Net PPE) was $214 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $595 Mil.
Total Current Liabilities was $288 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)
=(22.639 / 1892.23) / (29.405 / 1884.557)
=0.01196419 / 0.01560314
=0.7668

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)
=(768.481 / 1884.557) / (704.98 / 1892.23)
=0.40777806 / 0.3725657
=1.0945

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 - (574.894 + 207.633) / 819.191) / (1 - (653.585 + 214.048) / 906.884)
=0.04475635 / 0.04328117
=1.0341

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
=1892.23 / 1884.557
=1.0041

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))
=(49.472 / (49.472 + 214.048)) / (55.83 / (55.83 + 207.633))
=0.18773528 / 0.21190831
=0.8859

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)
=(578.828 / 1892.23) / (594.906 / 1884.557)
=0.30589727 / 0.31567419
=0.969

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)
=((200.255 + 246.687) / 819.191) / ((201.426 + 288.05) / 906.884)
=0.54558949 / 0.53973386
=1.0108

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
=(39.634 - 0 - 164.047) / 819.191
=-0.1519

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 -3.35 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

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
DSRI 1.68611.1580.86970.85620.93151.00081.23251.06171.13440.7591
GMI 1.15981.00431.05640.80660.85790.93670.97421.03571.04731.0785
AQI 0.57111.11811.06550.92780.69662.33590.65960.97940.79471.0341
SGI 0.91360.93140.87360.97741.08181.09821.11171.03921.05311.0142
DEPI 0.71560.91640.91760.92711.09011.49131.13121.01710.98780.9549
SGAI 1.20760.80711.0640.95020.94791.00180.97130.99621.02990.9906
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 -2.81-2.44-3.44-2.94-2.92-1.66-2.26-2.73-2.51-3.35

Pier 1 Imports Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 0.94241.051.02351.06131.19781.13561.13721.00470.88810.7668
GMI 0.99481.02031.03751.04541.051.04761.0451.0581.08231.0945
AQI 0.64370.97940.95660.97080.86840.79470.92680.89130.9481.0341
SGI 1.10891.05081.04431.04071.02771.0521.04511.03821.02111.0041
DEPI 1.02311.11261.15221.16721.16750.97320.90920.84310.83630.8859
SGAI 0.97831.02181.02111.02631.0411.02651.03471.00830.97980.969
LVGI 1.06691.14061.69011.71861.64931.57461.04081.07821.0461.0108
TATA -0.0878-0.0643-0.06-0.00630.03560.01040.0126-0.0482-0.1133-0.1519
M-score -3.01-2.72-2.91-2.62-2.33-2.51-2.29-2.73-3.10-3.35
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