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GuruFocus has detected 1 Warning Sign with Crown Crafts Inc $CRWS.
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Crown Crafts Inc (NAS:CRWS)
Beneish M-Score
-3.12 (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.

Crown Crafts Inc has a M-score of -3.11 suggests that the company is not a manipulator.

CRWS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.48   Max: -1.89
Current: -3.12

-5.48
-1.89

During the past 13 years, the highest Beneish M-Score of Crown Crafts Inc was -1.89. The lowest was -5.48. And the median was -2.75.


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 Crown Crafts 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 * 0.9598+0.528 * 0.9597+0.404 * 1.0012+0.892 * 0.7823+0.115 * 1.0454
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0512+4.679 * -0.1027-0.327 * 0.6904
=-3.11

* 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 $15.61 Mil.
Revenue was 17.308 + 17.262 + 15.809 + 15.599 = $65.98 Mil.
Gross Profit was 5.176 + 5.639 + 4.309 + 4.287 = $19.41 Mil.
Total Current Assets was $41.11 Mil.
Total Assets was $47.18 Mil.
Property, Plant and Equipment(Net PPE) was $0.44 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.93 Mil.
Selling, General & Admin. Expense(SGA) was $10.71 Mil.
Total Current Liabilities was $7.57 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 1.609 + 1.861 + 0.999 + 1.103 = $5.57 Mil.
Non Operating Income was 0.001 + -0.002 + -0.001 + 0.032 = $0.03 Mil.
Cash Flow from Operations was -1.563 + 5.043 + -1.389 + 8.298 = $10.39 Mil.
Accounts Receivable was $20.80 Mil.
Revenue was 25.077 + 20.691 + 20.716 + 17.858 = $84.34 Mil.
Gross Profit was 7.074 + 6.252 + 5.706 + 4.781 = $23.81 Mil.
Total Current Assets was $45.73 Mil.
Total Assets was $52.42 Mil.
Property, Plant and Equipment(Net PPE) was $0.43 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.06 Mil.
Selling, General & Admin. Expense(SGA) was $13.03 Mil.
Total Current Liabilities was $12.19 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)
=(15.614 / 65.978) / (20.796 / 84.342)
=0.23665464 / 0.24656755
=0.9598

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)
=(23.813 / 84.342) / (19.411 / 65.978)
=0.28233857 / 0.29420413
=0.9597

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 - (41.11 + 0.441) / 47.184) / (1 - (45.732 + 0.433) / 52.415)
=0.11938369 / 0.11924068
=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
=65.978 / 84.342
=0.7823

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))
=(1.058 / (1.058 + 0.433)) / (0.932 / (0.932 + 0.441))
=0.70959088 / 0.67880554
=1.0454

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)
=(10.711 / 65.978) / (13.025 / 84.342)
=0.16234199 / 0.15443077
=1.0512

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 + 7.573) / 47.184) / ((0 + 12.185) / 52.415)
=0.16049932 / 0.23247162
=0.6904

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
=(5.572 - 0.03 - 10.389) / 47.184
=-0.1027

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.

Crown Crafts Inc has a M-score of -3.11 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.

Crown Crafts Inc Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DSRI 1.3141.00990.96550.99011.14911.16290.96410.97420.94770.9598
GMI 1.01191.14830.92051.05260.97470.90880.90941.0120.97010.9597
AQI 0.85120.31571.73850.96180.9330.91420.88120.84440.86331.0012
SGI 1.04031.16710.98481.04540.94810.91921.03671.05760.9810.7823
DEPI 0.37320.87640.97681.01351.05271.2530.89360.96530.93921.0454
SGAI 1.00570.87741.06321.03920.96611.11271.08711.02990.92661.0512
LVGI 1.94791.330.55620.93250.71131.15420.8670.93211.11920.6904
TATA 0.0211-0.4523-0.13650.0502-0.0727-0.08960.04620.0199-0.0788-0.1027
M-score -2.49-4.74-2.78-2.18-2.66-2.94-2.34-2.40-3.02-3.11

Crown Crafts Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.21850.97421.003313.32070.81880.94770.90341.01640.91980.9598
GMI 1.00151.0121.01761.02730.99930.97010.96050.95210.95420.9597
AQI 0.85140.84440.8280.87750.89190.86331.01110.96420.91581.0012
SGI 1.03711.05761.09641.09451.01740.9810.93140.8730.8640.7823
DEPI 0.99560.96530.98060.98140.94810.93920.99010.99941.01581.0454
SGAI 1.01871.02991.0010.86440.90040.92660.93781.07751.04881.0512
LVGI 0.94570.93210.94780.77240.7931.11920.82720.76061.30690.6904
TATA 0.1010.01990.0001-0.0394-0.0905-0.0788-0.089-0.0853-0.1332-0.1027
M-score -1.82-2.40-2.448.82-3.02-3.02-3.00-2.95-3.46-3.11
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