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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

PIR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.03   Max: 6.8
Current: -3.1

-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 -2.74.


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 * 0.8875+0.528 * 1.0834+0.404 * 0.948+0.892 * 1.0218+0.115 * 0.8531
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9807+4.679 * -0.1133-0.327 * 1.046
=-3.10

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $41 Mil.
Revenue was 472.547 + 429.956 + 432.004 + 543.6 = $1,878 Mil.
Gross Profit was 178.493 + 149.518 + 164.677 + 214.442 = $707 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 $60 Mil.
Selling, General & Admin. Expense(SGA) was $562 Mil.
Total Current Liabilities was $323 Mil.
Long-Term Debt was $203 Mil.
Net Income was 10.919 + 3.166 + 6.874 + 33.089 = $54 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 74.21 + -60.685 + 28.339 + 111.9 = $154 Mil.
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 $48 Mil.
Selling, General & Admin. Expense(SGA) was $561 Mil.
Total Current Liabilities was $322 Mil.
Long-Term Debt was $205 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)
=(40.812 / 1878.107) / (45.002 / 1837.968)
=0.02173039 / 0.02448465
=0.8875

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)
=(149.518 / 1837.968) / (178.493 / 1878.107)
=0.40789611 / 0.37651209
=1.0834

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 - (627.047 + 211.599) / 880.217) / (1 - (666.761 + 208.722) / 921.383)
=0.04722813 / 0.04981642
=0.948

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
=1878.107 / 1837.968
=1.0218

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))
=(48.229 / (48.229 + 208.722)) / (59.691 / (59.691 + 211.599))
=0.18769727 / 0.22002654
=0.8531

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)
=(562.186 / 1878.107) / (560.997 / 1837.968)
=0.29933651 / 0.30522675
=0.9807

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)
=((203.464 + 323.352) / 880.217) / ((205.173 + 322.005) / 921.383)
=0.59850696 / 0.57215946
=1.046

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
=(54.048 - 0 - 153.764) / 880.217
=-0.1133

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 -3.10 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

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
DSRI 1.28931.68611.1580.86970.85620.93151.00081.23251.06171.1344
GMI 1.13831.15981.00431.05640.80660.85790.93670.97421.03571.0473
AQI 1.15170.57111.11811.06550.92780.69662.33590.65960.97940.8472
SGI 0.97340.91360.93140.87360.97741.08181.09821.11171.03921.0531
DEPI 0.91610.71560.91640.91760.92711.09011.49131.13121.01710.9878
SGAI 1.09961.20760.80711.0640.95020.94791.00180.97130.99621.0299
LVGI 1.41.2651.09461.13890.6250.82990.93630.97081.14061.5819
TATA 0.0202-0.1359-0.0181-0.1524-0.0639-0.06490.01730.0063-0.06430.0104
M-score -2.17-2.81-2.44-3.44-2.94-2.90-1.73-2.26-2.72-2.49

Pier 1 Imports Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 0.91840.94241.06171.03471.07281.21071.13441.13611.00380.8875
GMI 0.98850.99481.03571.05331.06151.06621.04731.04471.05821.0834
AQI 0.5920.64370.97940.95660.97080.86840.84720.92680.89130.948
SGI 1.11241.10891.03921.0331.02961.01681.05311.04611.03911.0218
DEPI 1.52511.49021.01711.05361.06771.07110.98780.92640.86150.8531
SGAI 0.98030.97830.99620.99581.00151.01651.02991.03821.01060.9807
LVGI 0.9521.06691.14061.69011.71861.64931.58191.04081.07821.046
TATA -0.0459-0.091-0.0643-0.06-0.00630.03560.01040.0126-0.0482-0.1133
M-score -2.76-2.97-2.72-2.91-2.62-2.33-2.49-2.29-2.72-3.10
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