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GuruFocus has detected 6 Warning Signs with Hasbro Inc $HAS.
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Hasbro Inc (NAS:HAS)
Beneish M-Score
-2.81 (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.

Hasbro Inc has a M-score of -2.81 suggests that the company is not a manipulator.

HAS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.33   Max: -1.6
Current: -2.81

-3.33
-1.6

During the past 13 years, the highest Beneish M-Score of Hasbro Inc was -1.60. The lowest was -3.33. And the median was -2.61.


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 Hasbro 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 * 0.9146+0.528 * 0.9989+0.404 * 0.9258+0.892 * 1.1036+0.115 * 0.949
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0252+4.679 * -0.0669-0.327 * 0.9739
=-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 (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $677 Mil.
Revenue was 849.663 + 1629.94 + 1679.757 + 878.945 = $5,038 Mil.
Gross Profit was 479.201 + 859.517 + 886.477 + 487.861 = $2,713 Mil.
Total Current Assets was $2,800 Mil.
Total Assets was $4,646 Mil.
Property, Plant and Equipment(Net PPE) was $270 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $1,592 Mil.
Total Current Liabilities was $1,202 Mil.
Long-Term Debt was $1,199 Mil.
Net Income was 68.599 + 192.725 + 257.798 + 52.106 = $571 Mil.
Non Operating Income was 11.386 + -12.981 + 6.584 + 3.748 = $9 Mil.
Cash Flow from Operations was 411.928 + 621.092 + -115.06 + -44.438 = $874 Mil.
Accounts Receivable was $671 Mil.
Revenue was 831.18 + 1465.354 + 1470.997 + 797.658 = $4,565 Mil.
Gross Profit was 470.971 + 761.467 + 777.898 + 445.19 = $2,456 Mil.
Total Current Assets was $2,524 Mil.
Total Assets was $4,365 Mil.
Property, Plant and Equipment(Net PPE) was $241 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $1,407 Mil.
Total Current Liabilities was $768 Mil.
Long-Term Debt was $1,547 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)
=(676.945 / 5038.305) / (670.663 / 4565.189)
=0.13435967 / 0.14690805
=0.9146

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)
=(2455.526 / 4565.189) / (2713.056 / 5038.305)
=0.53788047 / 0.53848586
=0.9989

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 - (2799.733 + 270.023) / 4645.87) / (1 - (2524.083 + 241.253) / 4364.695)
=0.33925056 / 0.36643087
=0.9258

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
=5038.305 / 4565.189
=1.1036

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))
=(154.789 / (154.789 + 241.253)) / (189.094 / (189.094 + 270.023))
=0.39083986 / 0.41186451
=0.949

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)
=(1591.516 / 5038.305) / (1406.67 / 4565.189)
=0.31588322 / 0.30812963
=1.0252

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)
=((1198.896 + 1201.814) / 4645.87) / ((1547.434 + 768.373) / 4364.695)
=0.51674068 / 0.53057705
=0.9739

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
=(571.228 - 8.737 - 873.522) / 4645.87
=-0.0669

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.

Hasbro Inc 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.

Hasbro Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.96660.89161.67870.94061.00511.04341.06360.95531.06990.9603
GMI 0.99511.01741.1430.95931.07260.92111.0540.95410.98860.9978
AQI 0.92791.09391.0670.95641.00330.91341.04370.94640.94570.915
SGI 1.21771.04791.01150.98381.07080.95410.99831.04781.03981.1287
DEPI 0.98311.03340.9761.16970.90851.0740.91011.08591.01030.9598
SGAI 0.89031.20430.82911.0550.9221.13660.94880.9891.00151.0215
LVGI 1.0910.96541.04921.03441.09710.96060.96851.09780.9550.9999
TATA -0.0669-0.08290.02810.00820.0036-0.0428-0.0228-0.0072-0.0226-0.0424
M-score -2.67-2.90-1.60-2.55-2.38-2.76-2.47-2.58-2.50-2.64

Hasbro Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.95530.96910.93351.0531.06991.12440.91380.92140.96030.9146
GMI 0.95410.95460.94070.96670.98860.99571.00641.00980.99780.9989
AQI 0.94640.96080.95960.9530.94570.93110.92310.91180.9150.9258
SGI 1.04781.05211.02861.00481.03981.05891.08571.13421.12871.1036
DEPI 1.08591.11751.07411.07731.01031.00441.07171.11680.95980.949
SGAI 0.9891.00271.01871.02151.00150.9990.99350.9861.02151.0252
LVGI 1.09781.09181.00820.99830.9550.95350.94830.99650.99990.9739
TATA -0.0072-0.0262-0.0366-0.0143-0.0226-0.0169-0.0231-0.0209-0.0424-0.0669
M-score -2.58-2.64-2.73-2.52-2.50-2.41-2.59-2.54-2.64-2.81
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