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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 -4.06 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 -4.06. And the median was -2.77.
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 * 0.4243||+||0.528 * 1.0068||+||0.404 * 1.0318||+||0.892 * 0.9528||+||0.115 * 0.9372|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.989||+||4.679 * -0.2168||-||0.327 * 1.0164|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $22 Mil.|
Revenue was 464.551 + 483.926 + 471.561 + 468.367 = $1,888 Mil.
Gross Profit was 195.887 + 204.831 + 199.071 + 194.493 = $794 Mil.
Total Current Assets was $422 Mil.
Total Assets was $1,210 Mil.
Property, Plant and Equipment(Net PPE) was $253 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $697 Mil.
Total Current Liabilities was $209 Mil.
Long-Term Debt was $120 Mil.
Net Income was -9.052 + -17.022 + -9.484 + -109.085 = $-145 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 16.033 + 33.689 + 34.485 + 33.473 = $118 Mil.
|Accounts Receivable was $55 Mil.
Revenue was 468.583 + 502.251 + 504.937 + 506.165 = $1,982 Mil.
Gross Profit was 199.544 + 205.573 + 217.34 + 216.836 = $839 Mil.
Total Current Assets was $486 Mil.
Total Assets was $1,380 Mil.
Property, Plant and Equipment(Net PPE) was $302 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $740 Mil.
Total Current Liabilities was $369 Mil.
Long-Term Debt was $0 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)|
|=||(22.085 / 1888.405)||/||(54.633 / 1981.936)|
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)|
|=||(204.831 / 1981.936)||/||(195.887 / 1888.405)|
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 - (421.66 + 253.072) / 1209.928)||/||(1 - (486.177 + 302.4) / 1380.282)|
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))|
|=||(85.014 / (85.014 + 302.4))||/||(77.371 / (77.371 + 253.072))|
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)|
|=||(697.279 / 1888.405)||/||(739.934 / 1981.936)|
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 + 208.791) / 1209.928)||/||((0.015 + 369.033) / 1380.282)|
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|
|=||(-144.643 - 0||-||117.68)||/||1209.928|
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 -4.06 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