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Regis Corp (NYSE:RGS)
Beneish M-Score
-2.96 (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.

Regis Corp has a M-score of -2.96 suggests that the company is not a manipulator.

RGS' s 10-Year Beneish M-Score Range
Min: -3.61   Max: -1.01
Current: -2.96

-3.61
-1.01

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.


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 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 * 1.2315+0.528 * 1.0488+0.404 * 0.7735+0.892 * 0.9364+0.115 * 0.9591
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0108+4.679 * -0.1155-0.327 * 1.0844
=-2.96

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $44 Mil.
Revenue was 468.367 + 468.583 + 502.251 + 504.937 = $1,944 Mil.
Gross Profit was 194.493 + 199.544 + 205.573 + 217.34 = $817 Mil.
Total Current Assets was $589 Mil.
Total Assets was $1,434 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $723 Mil.
Total Current Liabilities was $370 Mil.
Long-Term Debt was $120 Mil.
Net Income was -109.085 + -0.136 + 0.675 + 2.361 = $-106 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 33.473 + 15.756 + -12.592 + 22.771 = $59 Mil.
Accounts Receivable was $38 Mil.
Revenue was 506.165 + 505.36 + 528.842 + 535.901 = $2,076 Mil.
Gross Profit was 216.836 + 219.7 + 238.9 + 239.624 = $915 Mil.
Total Current Assets was $467 Mil.
Total Assets was $1,541 Mil.
Property, Plant and Equipment(Net PPE) was $303 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $764 Mil.
Total Current Liabilities was $245 Mil.
Long-Term Debt was $240 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)
=(44.352 / 1944.138) / (38.461 / 2076.268)
=0.0228132 / 0.0185241
=1.2315

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)
=(199.544 / 2076.268) / (194.493 / 1944.138)
=0.44072345 / 0.42021194
=1.0488

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 - (588.528 + 290.378) / 1434.066) / (1 - (466.958 + 302.756) / 1540.903)
=0.38712305 / 0.50047862
=0.7735

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
=1944.138 / 2076.268
=0.9364

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))
=(85.364 / (85.364 + 302.756)) / (86.407 / (86.407 + 290.378))
=0.21994229 / 0.22932707
=0.9591

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)
=(723.285 / 1944.138) / (764.16 / 2076.268)
=0.37203378 / 0.36804497
=1.0108

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)
=((120.01 + 369.586) / 1434.066) / ((240.033 + 245.087) / 1540.903)
=0.34140409 / 0.31482838
=1.0844

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
=(-106.185 - 0 - 59.408) / 1434.066
=-0.1155

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 -2.96 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.

Regis Corp Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 0.96051.19461.18261.00260.53522.74470.83860.7491.4270.9796
GMI 0.86131.00591.0010.99281.02541.0080.99151.01550.99691.0613
AQI 1.05861.16321.00940.98091.12141.03620.97171.04420.85140.723
SGI 1.14161.1411.10781.08051.04270.88720.97060.92440.97340.9512
DEPI 0.99740.94620.92640.94720.96260.8781.02411.00510.941.2822
SGAI 1.24871.07290.9621.00760.98810.99421.03261.07210.97571.0072
LVGI 0.88291.23490.99321.02960.96990.96750.76080.8651.09490.8368
TATA -0.0807-0.0893-0.087-0.066-0.0617-0.1651-0.0779-0.1318-0.1704-0.0287
M-score -2.82-2.62-2.62-2.74-3.09-1.73-2.96-3.34-3.00-2.67

Regis Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.1781.02130.60731.4271.02960.7841.16870.97961.241.2315
GMI 1.02921.02791.02710.99691.00481.01651.02311.06131.05441.0488
AQI 1.05571.01350.9870.85140.80680.83110.85940.7230.85730.7735
SGI 0.91510.89480.87770.97340.98260.99581.00280.95120.94550.9364
DEPI 0.90760.86880.87670.940.99471.15891.18021.28221.10060.9591
SGAI 1.08441.08051.04540.97570.95660.94680.97161.00721.00941.0108
LVGI 0.8960.96890.94471.09491.05371.02641.02150.83680.84881.0844
TATA -0.1114-0.1645-0.1428-0.1704-0.1484-0.123-0.1086-0.0287-0.0622-0.1155
M-score -2.87-3.32-3.61-3.00-3.25-3.30-2.86-2.67-2.57-2.96
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