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GuruFocus has detected 7 Warning Signs with Tiffany & Co $TIF.
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Tiffany & Co (NYSE:TIF)
Beneish M-Score
-2.77 (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.

Tiffany & Co has a M-score of -2.77 suggests that the company is not a manipulator.

TIF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12   Max: -1.69
Current: -2.77

-3.12
-1.69

During the past 13 years, the highest Beneish M-Score of Tiffany & Co was -1.69. The lowest was -3.12. And the median was -2.42.


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 Tiffany & Co 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 * 1.0858+0.528 * 0.9703+0.404 * 1.0192+0.892 * 0.9544+0.115 * 0.9908
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0706+4.679 * -0.0656-0.327 * 1.0151
=-2.77

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

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $214 Mil.
Revenue was 949.3 + 931.6 + 891.3 + 1213.7 = $3,986 Mil.
Gross Profit was 579.5 + 577.1 + 545.6 + 764.8 = $2,467 Mil.
Total Current Assets was $3,509 Mil.
Total Assets was $5,139 Mil.
Property, Plant and Equipment(Net PPE) was $952 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $1,741 Mil.
Total Current Liabilities was $636 Mil.
Long-Term Debt was $886 Mil.
Net Income was 95.1 + 105.7 + 87.5 + 163.2 = $452 Mil.
Non Operating Income was 0 + 0 + 0 + -1.2 = $-1 Mil.
Cash Flow from Operations was 197.6 + 126.9 + 79.1 + 386.1 = $790 Mil.
Accounts Receivable was $207 Mil.
Revenue was 938.2 + 990.5 + 962.4 + 1285.2 = $4,176 Mil.
Gross Profit was 564.5 + 593 + 569 + 781.6 = $2,508 Mil.
Total Current Assets was $3,585 Mil.
Total Assets was $5,166 Mil.
Property, Plant and Equipment(Net PPE) was $912 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $1,704 Mil.
Total Current Liabilities was $709 Mil.
Long-Term Debt was $798 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)
=(214 / 3985.9) / (206.5 / 4176.3)
=0.05368925 / 0.04944568
=1.0858

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)
=(2508.1 / 4176.3) / (2467 / 3985.9)
=0.60055552 / 0.61893173
=0.9703

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 - (3509.2 + 951.8) / 5139.1) / (1 - (3584.8 + 912.2) / 5165.8)
=0.13194917 / 0.12946688
=1.0192

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
=3985.9 / 4176.3
=0.9544

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))
=(199 / (199 + 912.2)) / (210 / (210 + 951.8))
=0.17908567 / 0.180754
=0.9908

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)
=(1741.4 / 3985.9) / (1704.3 / 4176.3)
=0.43689004 / 0.4080885
=1.0706

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)
=((885.7 + 635.7) / 5139.1) / ((798.1 + 708.5) / 5165.8)
=0.29604405 / 0.29164892
=1.0151

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
=(451.5 - -1.2 - 789.7) / 5139.1
=-0.0656

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.

Tiffany & Co has a M-score of -2.77 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.

Tiffany & Co Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.05111.02070.87451.01471.02910.83830.90751.02140.98061.0947
GMI 0.98311.01990.97581.02340.95611.00021.03570.9820.97250.9837
AQI 1.04171.38170.9151.01761.00681.16991.18120.98691.05920.8872
SGI 1.10721.14760.96940.95121.13861.18071.04151.06241.05430.9659
DEPI 0.99990.76850.94270.91610.93021.13740.95950.95520.98210.9981
SGAI 0.99211.03880.98790.99280.98930.99540.97570.99891.00331.089
LVGI 1.05981.02471.07050.96940.89090.97941.04211.04370.9760.998
TATA 0.0083-0.0610.028-0.12070.01670.05370.01780.0028-0.0077-0.068
M-score -2.31-2.49-2.57-3.05-2.24-2.12-2.37-2.43-2.47-2.81

Tiffany & Co Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.09140.99520.98060.97690.95131.18881.09471.19811.26751.0858
GMI 0.96570.96610.97250.97640.98620.99260.98370.97940.9710.9703
AQI 0.88830.85831.05921.11661.15781.08090.88720.88670.90721.0192
SGI 1.0781.07411.05431.01260.9960.97970.96590.96040.94690.9544
DEPI 0.94940.96990.98211.01911.0220.99850.99810.99220.98580.9908
SGAI 0.98951.0031.00331.0451.06261.05981.0891.09011.07261.0706
LVGI 1.01171.06320.9760.98391.00080.95620.9981.03241.01271.0151
TATA 0.01470.0341-0.0014-0.0248-0.0458-0.0717-0.068-0.0585-0.0512-0.0656
M-score -2.33-2.36-2.44-2.57-2.69-2.63-2.81-2.69-2.59-2.77
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