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GuruFocus has detected 3 Warning Signs with Stanley Furniture Co Inc $STLY.
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Stanley Furniture Co Inc (NAS:STLY)
Beneish M-Score
-4.08 (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.

Stanley Furniture Co Inc has a M-score of -4.08 suggests that the company is not a manipulator.

STLY' s Beneish M-Score Range Over the Past 10 Years
Min: -5.63   Max: 3.09
Current: -4.08

-5.63
3.09

During the past 13 years, the highest Beneish M-Score of Stanley Furniture Co Inc was 3.09. The lowest was -5.63. And the median was -2.62.


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 Stanley Furniture Co 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 * 0.649+0.528 * 1.2638+0.404 * 0.1954+0.892 * 0.777+0.115 * 0.9198
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4212+4.679 * -0.1099-0.327 * 1.9144
=-4.08

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $3.49 Mil.
Revenue was 9.802 + 11.036 + 12.053 + 11.683 = $44.57 Mil.
Gross Profit was 1.976 + 1.835 + 2.062 + 2.541 = $8.41 Mil.
Total Current Assets was $32.05 Mil.
Total Assets was $36.52 Mil.
Property, Plant and Equipment(Net PPE) was $1.61 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.47 Mil.
Selling, General & Admin. Expense(SGA) was $13.98 Mil.
Total Current Liabilities was $8.40 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -0.301 + -2.08 + -1.392 + -1.485 = $-5.26 Mil.
Non Operating Income was 1.319 + 0.017 + 0.006 + 0.005 = $1.35 Mil.
Cash Flow from Operations was 0.586 + -1.777 + 0.795 + -2.197 = $-2.59 Mil.
Accounts Receivable was $6.93 Mil.
Revenue was 13.799 + 13.76 + 15.133 + 14.672 = $57.36 Mil.
Gross Profit was 3.453 + 3.41 + 3.839 + 2.983 = $13.69 Mil.
Total Current Assets was $35.98 Mil.
Total Assets was $63.15 Mil.
Property, Plant and Equipment(Net PPE) was $1.79 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.47 Mil.
Selling, General & Admin. Expense(SGA) was $12.66 Mil.
Total Current Liabilities was $7.58 Mil.
Long-Term Debt was $0.00 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)
=(3.492 / 44.574) / (6.925 / 57.364)
=0.07834163 / 0.12072031
=0.649

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)
=(13.685 / 57.364) / (8.414 / 44.574)
=0.23856426 / 0.18876475
=1.2638

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 - (32.047 + 1.606) / 36.521) / (1 - (35.978 + 1.787) / 63.146)
=0.07853016 / 0.40194153
=0.1954

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
=44.574 / 57.364
=0.777

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))
=(0.47 / (0.47 + 1.787)) / (0.47 / (0.47 + 1.606))
=0.20824103 / 0.22639692
=0.9198

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)
=(13.982 / 44.574) / (12.661 / 57.364)
=0.31368062 / 0.22071334
=1.4212

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 + 8.397) / 36.521) / ((0 + 7.584) / 63.146)
=0.22992251 / 0.12010262
=1.9144

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
=(-5.258 - 1.347 - -2.593) / 36.521
=-0.1099

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.

Stanley Furniture Co Inc has a M-score of -4.08 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 local exchange's currency.

Stanley Furniture Co Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.85591.07560.98730.7571.35751.67090.5851.00821.25040.649
GMI 1.27181.152713.1472-0.0931-0.98620.52961.04591.08580.83061.2638
AQI 0.9311.04451.10160.07951.22235.41792.06494.5171.29270.1954
SGI 0.91970.80090.70830.85390.76380.58540.95591.03520.94620.777
DEPI 0.62070.85561.2460.43294.33720.29280.02190.91211.0130.9198
SGAI 1.02111.14981.03310.90581.2221.38011.09490.88320.89911.4212
LVGI 1.43780.93821.03890.6710.93980.65981.14371.0550.7391.9144
TATA -0.16-0.1588-0.1334-0.4069-0.0224-0.3531-0.0908-0.2767-0.0728-0.1039
M-score -3.51-3.253.09-5.63-3.06-0.08-3.05-2.28-2.51-4.05

Stanley Furniture Co Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.39771.34530.57510.57861.0581.25041.03630.89060.93580.649
GMI 1.34020.74780.83910.90390.79970.83060.81630.98621.15031.2638
AQI 1.01944.5176.48825.03096.08481.29270.15430.13240.18830.1954
SGI 1.13570.77580.90891.01971.02970.94620.89650.85850.81520.777
DEPI -0.19220.91210.0406-0.14331.17721.0130.95870.87290.92750.9198
SGAI 0.91931.060.8950.7990.78250.89910.96491.06691.25671.4212
LVGI 0.96521.0550.89090.7950.75570.7390.79861.02412.00271.9144
TATA -0.3434-0.2767-0.2534-0.0531-0.0268-0.0899-0.0518-0.0725-0.1248-0.1099
M-score -4.44-2.41-2.06-1.55-0.44-2.59-3.15-3.44-3.92-4.08
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