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rue21 Inc (NAS:RUE)
Beneish M-Score
0.00 (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.

rue21 Inc has a M-score of -2.88 suggests that the company is not a manipulator.

RUE' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 6 years, the highest Beneish M-Score of rue21 Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 rue21 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 * 0.8428+0.528 * 1.0082+0.404 * 1.2159+0.892 * 1.1527+0.115 * 0.9902
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0703+4.679 * -0.1024-0.327 * 0.9792
=-2.88

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

This Year (Jul13) TTM:Last Year (Jul12) TTM:
Accounts Receivable was $11.0 Mil.
Revenue was 229.322 + 224.375 + 269.054 + 225.158 = $947.9 Mil.
Gross Profit was 79.559 + 89.699 + 101.2 + 85.106 = $355.6 Mil.
Total Current Assets was $266.8 Mil.
Total Assets was $430.2 Mil.
Property, Plant and Equipment(Net PPE) was $158.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.8 Mil.
Selling, General & Admin. Expense(SGA) was $264.7 Mil.
Total Current Liabilities was $177.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.085 + 10.798 + 15.043 + 8.165 = $35.1 Mil.
Non Operating Income was -0.044 + 0 + 0 + 0 = $-0.0 Mil.
Cash Flow from Operations was 12.215 + 20.483 + 35.954 + 10.544 = $79.2 Mil.
Accounts Receivable was $11.3 Mil.
Revenue was 202.059 + 205.615 + 219.896 + 194.761 = $822.3 Mil.
Gross Profit was 79.531 + 79.681 + 80.364 + 71.4 = $311.0 Mil.
Total Current Assets was $249.0 Mil.
Total Assets was $385.5 Mil.
Property, Plant and Equipment(Net PPE) was $133.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.7 Mil.
Selling, General & Admin. Expense(SGA) was $214.5 Mil.
Total Current Liabilities was $162.8 Mil.
Long-Term Debt was $0.0 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)
=(11 / 947.909) / (11.322 / 822.331)
=0.01160449 / 0.01376818
=0.8428

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)
=(89.699 / 822.331) / (79.559 / 947.909)
=0.37816402 / 0.37510352
=1.0082

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 - (266.781 + 158.92) / 430.226) / (1 - (249.001 + 133.202) / 385.538)
=0.01051773 / 0.00865025
=1.2159

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
=947.909 / 822.331
=1.1527

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))
=(29.65 / (29.65 + 133.202)) / (35.803 / (35.803 + 158.92))
=0.18206715 / 0.18386631
=0.9902

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)
=(264.686 / 947.909) / (214.533 / 822.331)
=0.27923145 / 0.260884
=1.0703

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)
=((0 + 177.894) / 430.226) / ((0 + 162.8) / 385.538)
=0.41348965 / 0.42226707
=0.9792

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
=(35.091 - -0.044 - 79.196) / 430.226
=-0.1024

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.

rue21 Inc has a M-score of -2.88 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.

rue21 Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13
DSRI 0.82761.333
GMI 0.98130.9841
AQI 0.80873.0665
SGI 1.19781.1862
DEPI 1.04710.9943
SGAI 1.00981.0436
LVGI 0.89740.9324
TATA -0.1013-0.0778
M-score -2.99-1.53

rue21 Inc Quarterly Data

Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13
DSRI 1.04271.08890.82760.80580.69920.81181.3330.76320.8428
GMI 0.98310.98650.98130.98910.99380.98610.98410.97651.0082
AQI 0.72310.77080.80870.75032.85772.99013.06653.93611.2159
SGI 1.22061.21751.19781.18391.17531.16731.18621.16091.1527
DEPI 1.06131.0541.04711.04771.00510.97820.99430.98580.9902
SGAI 0.99620.99381.00981.0151.00721.02891.04361.06421.0703
LVGI 0.93650.89430.89740.89070.8990.98580.93240.9640.9792
TATA -0.123-0.0923-0.1013-0.1106-0.1021-0.1081-0.0778-0.0639-0.1024
M-score -2.91-2.69-2.99-3.08-2.30-2.22-1.53-1.68-2.88
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