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Tiffany & Co (NYSE:TIF)
Beneish M-Score
-2.59 (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 -2.81 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: -2.59

-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 * 1.0947+0.528 * 0.9837+0.404 * 0.8872+0.892 * 0.9659+0.115 * 0.9981
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.089+4.679 * -0.068-0.327 * 0.998
=-2.81

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $206 Mil.
Revenue was $4,105 Mil.
Gross Profit was $2,491 Mil.
Total Current Assets was $3,508 Mil.
Total Assets was $5,122 Mil.
Property, Plant and Equipment(Net PPE) was $936 Mil.
Depreciation, Depletion and Amortization(DDA) was $203 Mil.
Selling, General & Admin. Expense(SGA) was $1,731 Mil.
Total Current Liabilities was $730 Mil.
Long-Term Debt was $790 Mil.
Net Income was $464 Mil.
Non Operating Income was $-1 Mil.
Cash Flow from Operations was $814 Mil.
Accounts Receivable was $195 Mil.
Revenue was $4,250 Mil.
Gross Profit was $2,537 Mil.
Total Current Assets was $3,509 Mil.
Total Assets was $5,181 Mil.
Property, Plant and Equipment(Net PPE) was $900 Mil.
Depreciation, Depletion and Amortization(DDA) was $194 Mil.
Selling, General & Admin. Expense(SGA) was $1,646 Mil.
Total Current Liabilities was $658 Mil.
Long-Term Debt was $883 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)
=(206.4 / 4104.9) / (195.2 / 4249.9)
=0.05028137 / 0.04593049
=1.0947

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)
=(2537.2 / 4249.9) / (2491.3 / 4104.9)
=0.59700228 / 0.60690882
=0.9837

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 - (3508.4 + 935.8) / 5121.6) / (1 - (3508.8 + 899.5) / 5180.6)
=0.13226336 / 0.1490754
=0.8872

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
=4104.9 / 4249.9
=0.9659

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))
=(194.2 / (194.2 + 899.5)) / (202.5 / (202.5 + 935.8))
=0.1775624 / 0.17789686
=0.9981

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)
=(1731.2 / 4104.9) / (1645.8 / 4249.9)
=0.42173987 / 0.38725617
=1.089

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)
=((790 + 729.9) / 5121.6) / ((882.5 + 658) / 5180.6)
=0.29676273 / 0.29735938
=0.998

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
=(463.9 - -1.2 - 813.6) / 5121.6
=-0.068

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 -2.81 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
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