Switch to:
GuruFocus has detected 6 Warning Signs with Pier 1 Imports Inc $PIR.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-3.14 (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 -3.14 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: -3.14

-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 -2.80.


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 * 0.9941+0.528 * 1.0392+0.404 * 0.8815+0.892 * 0.9635+0.115 * 0.8608
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0264+4.679 * -0.1212-0.327 * 1.0269
=-3.14

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

This Year (Nov16) TTM:Last Year (Nov15) TTM:
Accounts Receivable was $39 Mil.
Revenue was 475.901 + 405.823 + 418.37 + 542.325 = $1,842 Mil.
Gross Profit was 196.393 + 145.036 + 148.967 + 196.894 = $687 Mil.
Total Current Assets was $642 Mil.
Total Assets was $867 Mil.
Property, Plant and Equipment(Net PPE) was $190 Mil.
Depreciation, Depletion and Amortization(DDA) was $60 Mil.
Selling, General & Admin. Expense(SGA) was $590 Mil.
Total Current Liabilities was $334 Mil.
Long-Term Debt was $199 Mil.
Net Income was 13.577 + -4.069 + -6.02 + 18.675 = $22 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 58.678 + -87.128 + 33.523 + 122.183 = $127 Mil.
Accounts Receivable was $41 Mil.
Revenue was 478.047 + 434.992 + 436.866 + 562.375 = $1,912 Mil.
Gross Profit was 183.993 + 154.554 + 169.539 + 233.217 = $741 Mil.
Total Current Assets was $627 Mil.
Total Assets was $880 Mil.
Property, Plant and Equipment(Net PPE) was $212 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $596 Mil.
Total Current Liabilities was $323 Mil.
Long-Term Debt was $203 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)
=(39.089 / 1842.419) / (40.812 / 1912.28)
=0.02121613 / 0.02134206
=0.9941

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)
=(741.303 / 1912.28) / (687.29 / 1842.419)
=0.387654 / 0.37303675
=1.0392

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 - (641.506 + 189.787) / 867.406) / (1 - (627.047 + 211.599) / 880.217)
=0.04163333 / 0.04722813
=0.8815

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
=1842.419 / 1912.28
=0.9635

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))
=(54.864 / (54.864 + 211.599)) / (59.664 / (59.664 + 189.787))
=0.20589725 / 0.23918124
=0.8608

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)
=(589.752 / 1842.419) / (596.39 / 1912.28)
=0.32009657 / 0.31187378
=1.0264

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)
=((199.373 + 333.751) / 867.406) / ((203.464 + 323.352) / 880.217)
=0.61461876 / 0.59850696
=1.0269

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
=(22.163 - 0 - 127.256) / 867.406
=-0.1212

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 -3.14 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 1.68611.1580.86970.85620.93151.00081.23251.051.13560.7668
GMI 1.15981.00431.05640.80660.85790.93670.97421.02031.04761.0945
AQI 0.57111.11811.06550.92780.69662.33590.65960.97940.79471.0341
SGI 0.91360.93140.87360.97741.08181.09821.11171.05081.0521.0041
DEPI 0.71560.91640.91760.92711.09011.49131.13121.11260.97320.8859
SGAI 1.20760.80711.0640.95020.94791.00180.97131.02181.02650.969
LVGI 1.2651.09461.13890.6250.82990.93630.97081.14061.57461.0108
TATA -0.1359-0.0181-0.1524-0.0639-0.06490.01730.0063-0.06430.0104-0.1519
M-score -2.81-2.44-3.44-2.94-2.90-1.73-2.26-2.72-2.51-3.35

Pier 1 Imports Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 1.06131.19781.13561.13430.99950.8810.76681.00330.84410.9941
GMI 1.04541.051.04761.04111.04971.06841.09451.10861.08571.0392
AQI 0.97080.86840.79470.86950.89130.9481.03411.02090.93140.8815
SGI 1.04071.02771.0521.04781.04361.02941.00410.9850.96130.9635
DEPI 1.16721.16750.97320.90920.84310.83630.88590.88210.87910.8608
SGAI 1.02631.0411.02651.04041.01970.99770.9690.96670.9971.0264
LVGI 1.71861.64931.57461.03421.07821.0461.01081.03120.97771.0269
TATA -0.00630.03560.01040.0127-0.0482-0.1133-0.1519-0.1685-0.1512-0.1212
M-score -2.62-2.33-2.51-2.31-2.73-3.11-3.35-3.23-3.35-3.14
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK