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Beneish M-Score -0.47 higher than -2.22, which implies that it might have manipulated its financial results.
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 Stanley Furniture Co Inc was 3.09. The lowest was -10000000.00. And the median was -2.61.
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 * 1.058||+||0.528 * 0.7997||+||0.404 * 6.0848||+||0.892 * 1.0297||+||0.115 * 1.1772|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7825||+||4.679 * -0.034||-||0.327 * 0.7557|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $6.74 Mil.|
Revenue was 13.76 + 15.133 + 14.672 + 16.02 = $59.59 Mil.
Gross Profit was 3.41 + 3.839 + 2.983 + 3.726 = $13.96 Mil.
Total Current Assets was $34.85 Mil.
Total Assets was $60.65 Mil.
Property, Plant and Equipment(Net PPE) was $1.85 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.48 Mil.
Selling, General & Admin. Expense(SGA) was $13.05 Mil.
Total Current Liabilities was $5.90 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.465 + 1.303 + 2.655 + -3.21 = $1.21 Mil.
Non Operating Income was 0.012 + 1.105 + 3.831 + -2.51 = $2.44 Mil.
Cash Flow from Operations was 0.589 + 1.133 + 0.736 + -1.624 = $0.83 Mil.
|Accounts Receivable was $6.19 Mil.
Revenue was 13.928 + 16.033 + 14.642 + 13.265 = $57.87 Mil.
Gross Profit was 2.624 + 2.725 + 2.938 + 2.553 = $10.84 Mil.
Total Current Assets was $57.69 Mil.
Total Assets was $63.61 Mil.
Property, Plant and Equipment(Net PPE) was $1.80 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.57 Mil.
Selling, General & Admin. Expense(SGA) was $16.20 Mil.
Total Current Liabilities was $8.19 Mil.
Long-Term Debt was $0.00 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)|
|=||(6.741 / 59.585)||/||(6.188 / 57.868)|
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)|
|=||(3.839 / 57.868)||/||(3.41 / 59.585)|
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 - (34.854 + 1.851) / 60.648)||/||(1 - (57.685 + 1.797) / 63.609)|
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))|
|=||(0.57 / (0.57 + 1.797))||/||(0.476 / (0.476 + 1.851))|
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)|
|=||(13.048 / 59.585)||/||(16.195 / 57.868)|
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 + 5.902) / 60.648)||/||((0 + 8.191) / 63.609)|
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|
|=||(1.213 - 2.438||-||0.834)||/||60.648|
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 -0.47 signals that the company is likely to 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
Stanley Furniture Co Inc Annual Data
Stanley Furniture Co Inc Quarterly Data