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Pier 1 Imports Inc (NYSE:PIR)
Beneish M-Score
-2.29 (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 -2.29 suggests that the company is not a manipulator.

PIR' s 10-Year Beneish M-Score Range
Min: -4.03   Max: 6.8
Current: -2.29

-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 * 1.1361+0.528 * 1.0447+0.404 * 0.9268+0.892 * 1.0461+0.115 * 0.9264
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0382+4.679 * 0.0126-0.327 * 1.0408
=-2.29

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $26 Mil.
Revenue was 432.004 + 543.6 + 484.501 + 418.622 = $1,879 Mil.
Gross Profit was 164.677 + 214.442 + 204.913 + 162.637 = $747 Mil.
Total Current Assets was $673 Mil.
Total Assets was $924 Mil.
Property, Plant and Equipment(Net PPE) was $210 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $583 Mil.
Total Current Liabilities was $317 Mil.
Long-Term Debt was $204 Mil.
Net Income was 6.874 + 33.089 + 17.86 + 9.158 = $67 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 28.339 + 111.9 + 24.36 + -109.31 = $55 Mil.
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 $46 Mil.
Selling, General & Admin. Expense(SGA) was $537 Mil.
Total Current Liabilities was $306 Mil.
Long-Term Debt was $206 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)
=(25.938 / 1878.727) / (21.824 / 1795.948)
=0.01380616 / 0.0121518
=1.1361

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)
=(214.442 / 1795.948) / (164.677 / 1878.727)
=0.41520077 / 0.39743347
=1.0447

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 - (672.576 + 209.912) / 924.412) / (1 - (711.593 + 187.804) / 945.673)
=0.04535207 / 0.04893446
=0.9268

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
=1878.727 / 1795.948
=1.0461

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))
=(46.124 / (46.124 + 187.804)) / (56.753 / (56.753 + 209.912))
=0.19717178 / 0.21282508
=0.9264

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)
=(583.39 / 1878.727) / (537.186 / 1795.948)
=0.31052409 / 0.29911
=1.0382

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)
=((204.319 + 316.591) / 924.412) / ((206.026 + 305.962) / 945.673)
=0.56350415 / 0.54140067
=1.0408

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
=(66.981 - 0 - 55.289) / 924.412
=0.0126

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 -2.29 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 0.0202-0.1359-0.0181-0.1524-0.0639-0.06980.03240.0063-0.06430.0104
M-score -2.17-2.81-2.44-3.44-2.94-2.92-1.66-2.26-2.72-2.49

Pier 1 Imports Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 1.23250.850.91840.94241.06171.03471.07281.21071.13441.1361
GMI 0.97420.97810.98850.99481.03571.05331.06151.06621.04731.0447
AQI 0.65960.56660.5920.64370.97940.95660.97080.86840.84720.9268
SGI 1.11171.11441.11241.10891.03921.0331.02961.01681.05311.0461
DEPI 1.13121.04131.01611.02311.01711.05361.02831.01330.98780.9264
SGAI 0.97130.97150.98030.97830.99620.99581.00151.01651.02991.0382
LVGI 0.97081.01810.9521.06691.14061.69011.71861.64931.58191.0408
TATA 0.0058-0.0407-0.0452-0.0913-0.0654-0.0609-0.00690.03560.01040.0126
M-score -2.26-2.89-2.82-3.03-2.73-2.91-2.63-2.34-2.49-2.29
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