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GuruFocus has detected 2 Warning Signs with Banner Corp $BANR.
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Banner Corp (NAS:BANR)
Beneish M-Score
-2.37 (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.

Banner Corp has a M-score of -2.37 suggests that the company is not a manipulator.

BANR' s Beneish M-Score Range Over the Past 10 Years
Min: -7.38   Max: -1.66
Current: -2.37

-7.38
-1.66

During the past 13 years, the highest Beneish M-Score of Banner Corp was -1.66. The lowest was -7.38. And the median was -2.37.


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 Banner Corp 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 * 0.758+0.528 * 1+0.404 * 1.0012+0.892 * 1.3036+0.115 * 0.7401
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9282+4.679 * 0.0005-0.327 * 0.7637
=-2.37

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $30.3 Mil.
Revenue was 115.699 + 116.633 + 117.22 + 113.685 = $463.2 Mil.
Gross Profit was 115.699 + 116.633 + 117.22 + 113.685 = $463.2 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $10,068.4 Mil.
Property, Plant and Equipment(Net PPE) was $162.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.4 Mil.
Selling, General & Admin. Expense(SGA) was $237.8 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $216.5 Mil.
Net Income was 23.793 + 22.804 + 23.851 + 20.957 = $91.4 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 185.387 + -91.273 + 29.249 + -36.708 = $86.7 Mil.
Accounts Receivable was $30.7 Mil.
Revenue was 111.002 + 110.455 + 66.286 + 67.598 = $355.3 Mil.
Gross Profit was 111.002 + 110.455 + 66.286 + 67.598 = $355.3 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $9,745.6 Mil.
Property, Plant and Equipment(Net PPE) was $168.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.2 Mil.
Selling, General & Admin. Expense(SGA) was $196.5 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $274.4 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)
=(30.312 / 463.237) / (30.674 / 355.341)
=0.06543519 / 0.08632272
=0.758

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)
=(355.341 / 355.341) / (463.237 / 463.237)
=1 / 1
=1

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 - (0 + 162.467) / 10068.378) / (1 - (0 + 168.807) / 9745.594)
=0.98386364 / 0.98267863
=1.0012

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
=463.237 / 355.341
=1.3036

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))
=(15.17 / (15.17 + 168.807)) / (20.37 / (20.37 + 162.467))
=0.08245596 / 0.11141071
=0.7401

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)
=(237.837 / 463.237) / (196.543 / 355.341)
=0.51342401 / 0.55311096
=0.9282

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)
=((216.498 + 0) / 10068.378) / ((274.411 + 0) / 9745.594)
=0.02150277 / 0.02815744
=0.7637

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
=(91.405 - 0 - 86.655) / 10068.378
=0.0005

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.

Banner Corp has a M-score of -2.37 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.

Banner Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.89541.16660.93071.00820.5070.91311.56750.57961.49530.6766
GMI 1111111111
AQI 0.99471.00050.999411.00041.00061.00031.00131.00221.0001
SGI 1.27610.9961.26710.7871.06230.97981.08651.11111.29681.5055
DEPI 1.22550.64361.1230.99311.01521.06451.05840.94951.36790.6615
SGAI 0.91031.19650.7961.21380.96991.07590.66921.40721.08480.9465
LVGI 1.28920.8282.32240.69260.82190.7511.11910.94540.83390.7871
TATA -0.012-0.0273-0.0235-0.04-0.0225-0.0039-0.0112-0.00930.0030.0165
M-score -2.44-2.48-2.80-2.79-2.92-2.52-1.91-2.87-1.66-2.21

Banner Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.57961.02670.96220.96431.49531.08811.10210.94420.67660.758
GMI 1111111111
AQI 1.00131.0010.99990.99981.00221.00171.00261.00241.00011.0012
SGI 1.11111.15081.10841.0921.29681.4581.62391.78881.50551.3036
DEPI 0.94951.03921.04831.1031.36791.1290.95480.83070.66150.7401
SGAI 1.40721.40351.52031.53041.08481.08731.03680.99990.94650.9282
LVGI 0.94540.73630.77511.16830.83390.80811.54990.75580.78710.7637
TATA -0.0093-0.0053-0.0081-0.00590.0030.00190.00950.00920.01650.0005
M-score -2.87-2.32-2.47-2.59-1.66-1.92-1.98-1.72-2.21-2.37
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