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GuruFocus has detected 3 Warning Signs with Prestige Brands Holdings Inc $PBH.
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Prestige Brands Holdings Inc (NYSE:PBH)
Beneish M-Score
-2.12 (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.

Prestige Brands Holdings Inc has a M-score of -2.12 signals that the company is a manipulator.

PBH' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: -2.12
Current: -2.12

-4.25
-2.12

During the past 13 years, the highest Beneish M-Score of Prestige Brands Holdings Inc was -2.12. The lowest was -4.25. 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 Prestige Brands Holdings 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 * 1.3161+0.528 * 1.0217+0.404 * 0.9904+0.892 * 1.094+0.115 * 1.788
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0851+4.679 * -0.0197-0.327 * 1.0254
=-2.12

* 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 $135.3 Mil.
Revenue was 240.67 + 216.763 + 215.052 + 209.575 = $882.1 Mil.
Gross Profit was 130.183 + 124.547 + 123.965 + 121.591 = $500.3 Mil.
Total Current Assets was $334.4 Mil.
Total Assets was $3,911.3 Mil.
Property, Plant and Equipment(Net PPE) was $50.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.8 Mil.
Selling, General & Admin. Expense(SGA) was $217.5 Mil.
Total Current Liabilities was $162.0 Mil.
Long-Term Debt was $2,193.7 Mil.
Net Income was 11.09 + 31.641 + 32.195 + -5.531 = $69.4 Mil.
Non Operating Income was -1.42 + 0 + 0 + 0 = $-1.4 Mil.
Cash Flow from Operations was 7.424 + 40.066 + 49.531 + 50.751 = $147.8 Mil.
Accounts Receivable was $94.0 Mil.
Revenue was 207.855 + 200.195 + 206.065 + 192.132 = $806.2 Mil.
Gross Profit was 118.251 + 116.784 + 119.94 + 112.236 = $467.2 Mil.
Total Current Assets was $249.0 Mil.
Total Assets was $2,948.8 Mil.
Property, Plant and Equipment(Net PPE) was $15.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.7 Mil.
Selling, General & Admin. Expense(SGA) was $183.2 Mil.
Total Current Liabilities was $106.7 Mil.
Long-Term Debt was $1,625.3 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)
=(135.329 / 882.06) / (93.986 / 806.247)
=0.1534238 / 0.11657222
=1.3161

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)
=(467.211 / 806.247) / (500.286 / 882.06)
=0.57948867 / 0.5671791
=1.0217

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 - (334.434 + 50.595) / 3911.348) / (1 - (249.013 + 15.54) / 2948.791)
=0.90156105 / 0.91028425
=0.9904

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
=882.06 / 806.247
=1.094

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))
=(23.676 / (23.676 + 15.54)) / (25.792 / (25.792 + 50.595))
=0.60373317 / 0.33764908
=1.788

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)
=(217.502 / 882.06) / (183.22 / 806.247)
=0.24658413 / 0.22725046
=1.0851

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)
=((2193.732 + 162.009) / 3911.348) / ((1625.309 + 106.684) / 2948.791)
=0.60228366 / 0.58735699
=1.0254

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
=(69.395 - -1.42 - 147.772) / 3911.348
=-0.0197

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.

Prestige Brands Holdings Inc has a M-score of -2.12 signals that the company is likely to 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.

Prestige Brands Holdings Inc Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DSRI 1.22670.87770.88061.26061.0350.86280.9051.12230.97431.3161
GMI 1.00660.9840.99991.03270.9850.930.98680.98810.98091.0217
AQI 0.99720.94750.98561.04711.02090.98290.99561.02510.99110.9904
SGI 1.0250.92820.96521.15011.31081.40590.96331.19631.12821.094
DEPI 0.99641.01781.00011.01870.98131.55840.97941.03690.93331.788
SGAI 1.0671.13580.96841.13311.02340.86620.99941.13330.89761.0851
LVGI 0.9021.20180.8671.15711.31940.90830.92461.10770.93461.0254
TATA -0.0107-0.3163-0.0312-0.0541-0.017-0.0406-0.0115-0.03-0.0192-0.0197
M-score -2.28-4.25-2.72-2.40-2.36-2.36-2.64-2.38-2.46-2.12

Prestige Brands Holdings Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.16031.12231.16240.72670.85070.97430.96560.97821.26541.3161
GMI 1.00380.98810.97060.96760.96470.98090.99151.00091.01241.0217
AQI 1.0661.02511.0121.00320.98780.99110.97630.97780.98120.9904
SGI 1.10291.19631.26721.2781.1811.12821.08231.05961.07711.094
DEPI 1.04411.03690.90710.82910.82270.93330.97970.97980.99191.788
SGAI 1.14021.13331.07020.91240.90210.89760.91160.98711.00391.0851
LVGI 1.07821.10771.07930.90360.90040.93460.95540.94520.94821.0254
TATA -0.0232-0.03-0.0315-0.0333-0.0297-0.0192-0.0333-0.0346-0.0315-0.0197
M-score -2.37-2.38-2.30-2.63-2.59-2.46-2.58-2.60-2.30-2.12
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