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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.
During the past 13 years, the highest Beneish M-Score of Regis Corp was -1.80. The lowest was -3.98. And the median was -2.87.
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 * 0.8179||+||0.528 * 1.0012||+||0.404 * 1.1718||+||0.892 * 0.9709||+||0.115 * 0.9817|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.014||+||4.679 * -0.11||-||0.327 * 0.8099|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $26 Mil.|
Revenue was 462.889 + 453.96 + 455.887 + 464.551 = $1,837 Mil.
Gross Profit was 198.274 + 192.013 + 187.838 + 195.887 = $774 Mil.
Total Current Assets was $428 Mil.
Total Assets was $1,162 Mil.
Property, Plant and Equipment(Net PPE) was $218 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $688 Mil.
Total Current Liabilities was $217 Mil.
Long-Term Debt was $120 Mil.
Net Income was -2.009 + -3.71 + -19.071 + -9.052 = $-34 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 21.635 + 34.698 + 21.596 + 16.033 = $94 Mil.
|Accounts Receivable was $32 Mil.
Revenue was 483.926 + 471.561 + 468.367 + 468.583 = $1,892 Mil.
Gross Profit was 205.111 + 199.071 + 194.493 + 199.544 = $798 Mil.
Total Current Assets was $613 Mil.
Total Assets was $1,416 Mil.
Property, Plant and Equipment(Net PPE) was $267 Mil.
Depreciation, Depletion and Amortization(DDA) was $81 Mil.
Selling, General & Admin. Expense(SGA) was $699 Mil.
Total Current Liabilities was $387 Mil.
Long-Term Debt was $120 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)|
|=||(25.624 / 1837.287)||/||(32.269 / 1892.437)|
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)|
|=||(192.013 / 1892.437)||/||(198.274 / 1837.287)|
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 - (428.282 + 218.157) / 1162.015)||/||(1 - (613.266 + 266.538) / 1415.949)|
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))|
|=||(81.406 / (81.406 + 266.538))||/||(68.259 / (68.259 + 218.157))|
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)|
|=||(687.618 / 1837.287)||/||(698.505 / 1892.437)|
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 + 216.666) / 1162.015)||/||((120.002 + 386.536) / 1415.949)|
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|
|=||(-33.842 - 0||-||93.962)||/||1162.015|
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 -3.06 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