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GuruFocus has detected 3 Warning Signs with Iconix Brand Group Inc $ICON.
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Iconix Brand Group Inc (NAS:ICON)
Beneish M-Score
-3.88 (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.

Iconix Brand Group Inc has a M-score of -3.88 suggests that the company is not a manipulator.

ICON' s Beneish M-Score Range Over the Past 10 Years
Min: -4.84   Max: 7.8
Current: -3.88

-4.84
7.8

During the past 13 years, the highest Beneish M-Score of Iconix Brand Group Inc was 7.80. The lowest was -4.84. And the median was -2.40.


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 Iconix Brand Group 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 * 0.6545+0.528 * 1+0.404 * 0.8026+0.892 * 0.9473+0.115 * 1.1326
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.963+4.679 * -0.2018-0.327 * 1.0927
=-3.88

* 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 $59.9 Mil.
Revenue was 58.722 + 87.142 + 90.944 + 95.743 = $332.6 Mil.
Gross Profit was 58.722 + 87.142 + 90.944 + 95.743 = $332.6 Mil.
Total Current Assets was $604.6 Mil.
Total Assets was $1,896.7 Mil.
Property, Plant and Equipment(Net PPE) was $6.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $180.5 Mil.
Total Current Liabilities was $539.8 Mil.
Long-Term Debt was $706.2 Mil.
Net Income was -4.28 + -297.546 + 15.216 + 11.582 = $-275.0 Mil.
Non Operating Income was -5.91 + -5.693 + 13.615 + 4.968 = $7.0 Mil.
Cash Flow from Operations was 10.549 + 43.248 + 20.243 + 26.634 = $100.7 Mil.
Accounts Receivable was $96.6 Mil.
Revenue was 67.676 + 94.653 + 91.332 + 97.398 = $351.1 Mil.
Gross Profit was 67.676 + 94.653 + 91.332 + 97.398 = $351.1 Mil.
Total Current Assets was $386.2 Mil.
Total Assets was $2,531.5 Mil.
Property, Plant and Equipment(Net PPE) was $7.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.3 Mil.
Selling, General & Admin. Expense(SGA) was $197.9 Mil.
Total Current Liabilities was $139.8 Mil.
Long-Term Debt was $1,382.1 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)
=(59.921 / 332.551) / (96.647 / 351.059)
=0.1801859 / 0.2753013
=0.6545

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)
=(351.059 / 351.059) / (332.551 / 332.551)
=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 - (604.568 + 6.446) / 1896.71) / (1 - (386.221 + 7.348) / 2531.469)
=0.67785587 / 0.8445294
=0.8026

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
=332.551 / 351.059
=0.9473

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))
=(4.347 / (4.347 + 7.348)) / (3.149 / (3.149 + 6.446))
=0.37169731 / 0.32819177
=1.1326

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)
=(180.492 / 332.551) / (197.859 / 351.059)
=0.54274983 / 0.56360612
=0.963

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)
=((706.163 + 539.829) / 1896.71) / ((1382.122 + 139.769) / 2531.469)
=0.65692278 / 0.60118887
=1.0927

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
=(-275.028 - 6.98 - 100.674) / 1896.71
=-0.2018

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.

Iconix Brand Group Inc has a M-score of -3.88 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.

Iconix Brand Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.03161.16721.2440.72941.09361.11850.96461.23470.9538
GMI 11111110.84881.1782
AQI 1.0850.97320.93161.04540.98210.98280.98131.04440.978
SGI 1.98281.35471.07061.43311.11210.95671.10391.00230.9686
DEPI 0.79011.23371.28691.12891.07731.00870.84571.11481.2404
SGAI 0.911.23131.00421.21810.91571.02521.13371.04661.1648
LVGI 2.14490.85560.83720.85310.93881.24131.35151.01021.1595
TATA -0.0149-0.0185-0.0261-0.0304-0.0304-0.0437-0.0391-0.0302-0.1757
M-score -1.99-2.07-2.26-2.44-2.40-2.70-2.77-2.46-3.34

Iconix Brand Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.23471.0680.89180.78010.95380.86630.85610.90540.91130.6545
GMI 1111111111
AQI 1.04441.02651.00241.01030.9780.94460.97750.96580.91010.8026
SGI 1.00230.9521.00871.06090.96860.93140.92150.91710.90060.9473
DEPI 1.11481.24151.20711.23381.24041.16511.1751.2471.42911.1326
SGAI 1.04661.010.96210.99121.17241.21381.22151.05691.01030.963
LVGI 1.01021.01751.00960.98191.15951.12561.10221.08071.09711.0927
TATA -0.0302-0.0272-0.0418-0.0455-0.1757-0.1688-0.161-0.1513-0.1928-0.2018
M-score -2.38-2.56-2.74-2.80-3.44-3.54-3.50-3.37-3.57-3.88
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