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GuruFocus has detected 5 Warning Signs with Bon-Ton Stores Inc $BONT.
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Bon-Ton Stores Inc (NAS:BONT)
Beneish M-Score
-2.80 (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.

Bon-Ton Stores Inc has a M-score of -2.80 suggests that the company is not a manipulator.

BONT' s Beneish M-Score Range Over the Past 10 Years
Min: -4.15   Max: 71.67
Current: -2.8

-4.15
71.67

During the past 13 years, the highest Beneish M-Score of Bon-Ton Stores Inc was 71.67. The lowest was -4.15. And the median was -2.67.


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 Bon-Ton Stores 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 * 1.0904+0.528 * 0.9842+0.404 * 0.9962+0.892 * 0.9452+0.115 * 0.942
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0185+4.679 * -0.0663-0.327 * 1.068
=-2.80

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

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $40 Mil.
Revenue was 553.021 + 900.041 + 607.275 + 558.612 = $2,619 Mil.
Gross Profit was 189.46 + 340.393 + 224.383 + 214.339 = $969 Mil.
Total Current Assets was $804 Mil.
Total Assets was $1,468 Mil.
Property, Plant and Equipment(Net PPE) was $571 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $870 Mil.
Total Current Liabilities was $346 Mil.
Long-Term Debt was $1,027 Mil.
Net Income was -57.315 + 44.717 + -31.582 + -38.736 = $-83 Mil.
Non Operating Income was -0.559 + -0.076 + -0.676 + 0 = $-1 Mil.
Cash Flow from Operations was -30.995 + 139.936 + -144.541 + 51.291 = $16 Mil.
Accounts Receivable was $39 Mil.
Revenue was 608.423 + 950.359 + 640.897 + 570.999 = $2,771 Mil.
Gross Profit was 217.51 + 344.962 + 225.872 + 220.171 = $1,009 Mil.
Total Current Assets was $792 Mil.
Total Assets was $1,513 Mil.
Property, Plant and Equipment(Net PPE) was $623 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $903 Mil.
Total Current Liabilities was $334 Mil.
Long-Term Debt was $990 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)
=(40.37 / 2618.949) / (39.167 / 2770.678)
=0.01541458 / 0.01413625
=1.0904

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)
=(1008.515 / 2770.678) / (968.575 / 2618.949)
=0.36399574 / 0.36983347
=0.9842

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 - (803.61 + 570.709) / 1468.451) / (1 - (792.166 + 623.086) / 1512.584)
=0.06410292 / 0.06434816
=0.9962

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
=2618.949 / 2770.678
=0.9452

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))
=(92.944 / (92.944 + 623.086)) / (91.207 / (91.207 + 570.709))
=0.12980462 / 0.13779241
=0.942

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)
=(869.528 / 2618.949) / (903.151 / 2770.678)
=0.3320141 / 0.32596751
=1.0185

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)
=((1027.074 + 346.13) / 1468.451) / ((990.125 + 334.241) / 1512.584)
=0.93513777 / 0.87556526
=1.068

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
=(-82.916 - -1.311 - 15.691) / 1468.451
=-0.0663

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.

Bon-Ton Stores Inc has a M-score of -2.80 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.

Bon-Ton Stores Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.070282.55570.75020.87610.84740.86881.15441.515601
GMI 1.02741.02960.95520.99231.03971.00970.98671.01071.02340.9752
AQI 0.99450.69271.11390.91640.92180.90391.03390.78060.8990.9376
SGI 0.99780.930.94091.00380.96951.00860.95140.99610.98820.9587
DEPI 0.86811.02120.96091.01351.03081.03321.00690.96110.97520.9269
SGAI 1.01141.04230.99090.97451.02430.99161.00981.01251.01041.0142
LVGI 0.96611.08610.98360.97720.99891.00120.99881.01831.04631.0494
TATA -0.06-0.145-0.115-0.0722-0.0746-0.0275-0.0533-0.0142-0.0443-0.0808
M-score -3.6171.67-3.28-2.95-3.01-2.75-2.62-2.17-3.67-2.96

Bon-Ton Stores Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 1.51561.08581.18121.056601.13561.01611.027511.0904
GMI 1.01071.02271.0191.03441.02341.01371.01690.98970.97520.9842
AQI 0.78060.71470.88320.89030.8990.97960.83590.84080.93760.9962
SGI 0.99611.01181.00661.00310.98820.97990.9780.97220.95870.9452
DEPI 0.96110.9750.97960.97810.97520.95230.93490.93340.92690.942
SGAI 1.01250.99590.99520.99171.01041.02031.01921.01881.01421.0185
LVGI 1.01831.021.02571.03361.04631.04221.02531.02531.04941.068
TATA -0.0142-0.0148-0.0445-0.0237-0.0443-0.0678-0.0869-0.0768-0.0808-0.0663
M-score -2.17-2.57-2.56-2.57-3.67-2.71-2.97-2.93-2.96-2.80
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