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Stanley Furniture Company Inc. (NAS:STLY)
Beneish M-Score
-1.75 (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 Company Inc. has a M-score of -1.75 signals that the company is a manipulator.

STLY' s 10-Year Beneish M-Score Range
Min: -5.65   Max: 3.5
Current: -1.75

-5.65
3.5

During the past 13 years, the highest Beneish M-Score of Stanley Furniture Company Inc. was 3.50. The lowest was -5.65. And the median was -2.60.


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 Company 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 * 1.2169+0.528 * 1.2278+0.404 * 1.8251+0.892 * 0.9835+0.115 * 0.8174
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1105+4.679 * 0.0308-0.327 * 1.0289
=-1.75

* 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 $12.00 Mil.
Revenue was 22.744 + 23.982 + 24.166 + 26.052 = $96.94 Mil.
Gross Profit was 1.43 + 2.779 + 2.18 + 3.385 = $9.77 Mil.
Total Current Assets was $69.29 Mil.
Total Assets was $95.22 Mil.
Property, Plant and Equipment(Net PPE) was $20.14 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.24 Mil.
Selling, General & Admin. Expense(SGA) was $19.97 Mil.
Total Current Liabilities was $13.20 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -4.544 + -2.47 + -3.529 + -2.094 = $-12.64 Mil.
Non Operating Income was 0.016 + 0.033 + 0.016 + 0.002 = $0.07 Mil.
Cash Flow from Operations was -3.694 + -1.157 + -3.757 + -7.027 = $-15.64 Mil.
Accounts Receivable was $10.03 Mil.
Revenue was 23.384 + 23.977 + 24.428 + 26.781 = $98.57 Mil.
Gross Profit was 2.182 + 3.345 + 3.078 + 3.597 = $12.20 Mil.
Total Current Assets was $87.16 Mil.
Total Assets was $110.72 Mil.
Property, Plant and Equipment(Net PPE) was $19.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.77 Mil.
Selling, General & Admin. Expense(SGA) was $18.28 Mil.
Total Current Liabilities was $14.91 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)
=(12.002 / 96.944) / (10.028 / 98.57)
=0.12380343 / 0.10173481
=1.2169

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)
=(2.779 / 98.57) / (1.43 / 96.944)
=0.1237902 / 0.10082109
=1.2278

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 - (69.286 + 20.144) / 95.224) / (1 - (87.155 + 19.87) / 110.716)
=0.06084601 / 0.03333755
=1.8251

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
=96.944 / 98.57
=0.9835

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))
=(1.767 / (1.767 + 19.87)) / (2.236 / (2.236 + 20.144))
=0.08166567 / 0.09991063
=0.8174

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)
=(19.966 / 96.944) / (18.281 / 98.57)
=0.20595395 / 0.18546211
=1.1105

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 + 13.198) / 95.224) / ((0 + 14.914) / 110.716)
=0.13859951 / 0.13470501
=1.0289

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
=(-12.637 - 0.067 - -15.635) / 95.224
=0.0308

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 Company Inc. has a M-score of -1.75 signals that the company is likely to 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.

Stanley Furniture Company Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03780.940.9470.85591.07561.43150.73080.96991.03841.2169
GMI 0.94271.011.16111.27181.152713.1472-0.0931-0.98620.96271.2278
AQI 0.87741.00090.68750.9311.04451.10160.07951.22235.41791.8251
SGI 1.15291.0910.92180.91970.80090.70830.85390.76380.94190.9835
DEPI 0.96160.9820.9470.62070.85561.2460.43294.3371.0460.8174
SGAI 0.99680.99081.03271.02111.14981.03310.90581.2221.00821.1105
LVGI 0.86890.91431.08021.43780.93821.03890.6710.93980.65981.0289
TATA 0.0536-0.0518-0.143-0.122-0.1588-0.1334-0.4069-0.0224-0.31070.0308
M-score -2.10-2.66-3.35-3.33-3.253.50-5.65-3.42-2.07-1.75

Stanley Furniture Company Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.82210.96990.80920.88721.02671.03841.18851.27611.18041.2169
GMI -3.7109-0.9863-0.653-0.12650.21660.96271.11931.19391.23981.2278
AQI 1.32081.2223-1.93604435196E+131.34552.05925.41798.50282.45142.34491.8251
SGI 0.72170.76380.82530.87420.92680.94190.93310.95770.97760.9835
DEPI 1.44324.3374.37123.34852.16291.0460.99840.98450.91190.8174
SGAI 1.29141.2221.11821.08871.01961.00821.06291.08581.08661.1105
LVGI 0.69940.93980.89940.53760.6220.65980.55390.96980.92571.0289
TATA -0.1829-0.0224-0.0061-0.3151-0.3289-0.3107-0.29790.06490.06050.0308
M-score -6.01-3.42-7,821,619,181,917.47-4.22-3.79-2.07-0.53-1.28-1.38-1.75
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