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Lululemon Athletica Beneish M-Score

: -0.43 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Warning Sign:

Beneish M-Score -0.43 higher than -1.78, which implies that the company might have manipulated its financial results.

NAS:LULU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.5   Med: -2.5   Max: -0.35
Current: -0.43
-3.5
-0.35

During the past 13 years, the highest Beneish M-Score of Lululemon Athletica was -0.35. The lowest was -3.50. And the median was -2.50.

Lululemon Athletica Beneish M-Score Historical Data

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

* Premium members only.

Lululemon Athletica Annual Data
Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.74 -2.86 -2.07 -2.65 -2.59

Lululemon Athletica Quarterly Data
Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.50 -2.59 -1.33 -0.35 -0.43
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Lululemon Athletica Beneish M-Score Distribution

* The bar in red indicates where Lululemon Athletica's Beneish M-Score falls into.


Lululemon Athletica Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Lululemon Athletica 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 * 1.5405+0.528 * 0.9987+0.404 * 4.9342+0.892 * 1.0855+0.115 * 0.9177
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0536+4.679 * -0.0234-0.327 * 0.9443
=-0.43

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

This Year (Oct20) TTM:Last Year (Oct19) TTM:
Accounts Receivable was $60 Mil.
Revenue was 1117.426 + 902.942 + 651.962 + 1397.491 = $4,070 Mil.
Gross Profit was 627.354 + 489.501 + 334.402 + 810.826 = $2,262 Mil.
Total Current Assets was $1,601 Mil.
Total Assets was $3,628 Mil.
Property, Plant and Equipment(Net PPE) was $1,434 Mil.
Depreciation, Depletion and Amortization(DDA) was $181 Mil.
Selling, General, & Admin. Expense(SGA) was $1,461 Mil.
Total Current Liabilities was $731 Mil.
Long-Term Debt & Capital Lease Obligation was $635 Mil.
Net Income was 143.643 + 86.801 + 28.632 + 298.021 = $557 Mil.
Non Operating Income was -9.111 + -11.808 + 1.174 + 2.129 = $-18 Mil.
Cash Flow from Operations was 25.342 + 181.305 + -121.243 + 574.21 = $660 Mil.
 Accounts Receivable was $36 Mil.
Revenue was 916.138 + 883.352 + 782.315 + 1167.458 = $3,749 Mil.
Gross Profit was 505.044 + 485.796 + 421.72 + 668.583 = $2,081 Mil.
Total Current Assets was $1,452 Mil.
Total Assets was $2,855 Mil.
Property, Plant and Equipment(Net PPE) was $1,309 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General, & Admin. Expense(SGA) was $1,277 Mil.
Total Current Liabilities was $575 Mil.
Long-Term Debt & Capital Lease Obligation was $564 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(59.772 / 4069.821) / (35.744 / 3749.263)
=0.01468664 / 0.00953361
=1.5405

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)
=(2081.143 / 3749.263) / (2262.083 / 4069.821)
=0.55508056 / 0.55581879
=0.9987

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1600.813 + 1433.966) / 3627.92) / (1 - (1451.676 + 1308.864) / 2855.144)
=0.16349341 / 0.03313458
=4.9342

4. SGI = Sales Growth Index

Ratio of Revenue 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
=4069.821 / 3749.263
=1.0855

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(149.813 / (149.813 + 1308.864)) / (180.698 / (180.698 + 1433.966))
=0.10270471 / 0.11191059
=0.9177

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(1460.563 / 4069.821) / (1277.093 / 3749.263)
=0.35887647 / 0.34062508
=1.0536

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((635.386 + 730.878) / 3627.92) / ((563.925 + 574.769) / 2855.144)
=0.37659706 / 0.39882192
=0.9443

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
=(557.097 - -17.616 - 659.614) / 3627.92
=-0.0234

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Lululemon Athletica has a M-score of -0.43 signals that the company is likely to be a manipulator.

Lululemon Athletica Beneish M-Score Headlines

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