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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.
Regis Corp has a M-score of -3.37 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Regis Corp was -1.01. The lowest was -3.61. And the median was -2.75.
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 Regis Corp 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 * 0.8951||+||0.528 * 1.0443||+||0.404 * 0.7708||+||0.892 * 0.9342||+||0.115 * 0.8697|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9913||+||4.679 * -0.1325||-||0.327 * 1.0938|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $43 Mil.|
Revenue was 471.561 + 468.367 + 468.583 + 502.251 = $1,911 Mil.
Gross Profit was 199.071 + 194.493 + 199.544 + 205.573 = $799 Mil.
Total Current Assets was $604 Mil.
Total Assets was $1,427 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $706 Mil.
Total Current Liabilities was $374 Mil.
Long-Term Debt was $120 Mil.
Net Income was -9.484 + -109.085 + -0.136 + 0.675 = $-118 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 34.485 + 33.473 + 15.756 + -12.592 = $71 Mil.
|Accounts Receivable was $52 Mil.
Revenue was 504.937 + 506.165 + 505.36 + 528.842 = $2,045 Mil.
Gross Profit was 217.34 + 216.836 + 219.7 + 238.9 = $893 Mil.
Total Current Assets was $464 Mil.
Total Assets was $1,542 Mil.
Property, Plant and Equipment(Net PPE) was $307 Mil.
Depreciation, Depletion and Amortization(DDA) was $80 Mil.
Selling, General & Admin. Expense(SGA) was $762 Mil.
Total Current Liabilities was $249 Mil.
Long-Term Debt was $240 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(43.425 / 1910.762)||/||(51.932 / 2045.304)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(194.493 / 2045.304)||/||(199.071 / 1910.762)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (604.328 + 273.168) / 1427.339)||/||(1 - (463.946 + 307.295) / 1541.792)|
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.
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))|
|=||(79.713 / (79.713 + 307.295))||/||(84.77 / (84.77 + 273.168))|
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)|
|=||(705.936 / 1910.762)||/||(762.249 / 2045.304)|
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)|
|=||((120.005 + 374.293) / 1427.339)||/||((239.593 + 248.533) / 1541.792)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-118.03 - 0||-||71.122)||/||1427.339|
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.
Regis Corp has a M-score of -3.37 suggests that the company will not be a manipulator.
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
Regis Corp Annual Data
Regis Corp Quarterly Data