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GuruFocus has detected 1 Warning Sign with Perry Ellis International Inc $PERY.
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Perry Ellis International Inc (NAS:PERY)
Beneish M-Score
-2.60 (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.

Perry Ellis International Inc has a M-score of -2.60 suggests that the company is not a manipulator.

PERY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.18   Max: 3.26
Current: -2.6

-3.18
3.26

During the past 13 years, the highest Beneish M-Score of Perry Ellis International Inc was 3.26. The lowest was -3.18. And the median was -2.55.


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 Perry Ellis International 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 * 1.1157+0.528 * 0.959+0.404 * 1.0404+0.892 * 0.9573+0.115 * 0.941
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0604+4.679 * -0.0465-0.327 * 0.8363
=-2.60

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $132.9 Mil.
Revenue was 204.18 + 193.959 + 201.653 + 261.294 = $861.1 Mil.
Gross Profit was 78.49 + 71.103 + 73.831 + 95.084 = $318.5 Mil.
Total Current Assets was $341.2 Mil.
Total Assets was $592.7 Mil.
Property, Plant and Equipment(Net PPE) was $61.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.9 Mil.
Selling, General & Admin. Expense(SGA) was $280.0 Mil.
Total Current Liabilities was $117.9 Mil.
Long-Term Debt was $105.8 Mil.
Net Income was 8.997 + -5.165 + -3.565 + 14.25 = $14.5 Mil.
Non Operating Income was -0.195 + 0 + 0 + 0 = $-0.2 Mil.
Cash Flow from Operations was 5.053 + 2.307 + 73.934 + -39 = $42.3 Mil.
Accounts Receivable was $124.4 Mil.
Revenue was 214.363 + 205.439 + 213.299 + 266.414 = $899.5 Mil.
Gross Profit was 79.73 + 73.295 + 75.942 + 90.1 = $319.1 Mil.
Total Current Assets was $366.8 Mil.
Total Assets was $622.0 Mil.
Property, Plant and Equipment(Net PPE) was $63.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.3 Mil.
Selling, General & Admin. Expense(SGA) was $275.9 Mil.
Total Current Liabilities was $148.0 Mil.
Long-Term Debt was $132.6 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)
=(132.869 / 861.086) / (124.405 / 899.515)
=0.15430398 / 0.13830231
=1.1157

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)
=(319.067 / 899.515) / (318.508 / 861.086)
=0.35471004 / 0.36989104
=0.959

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 - (341.216 + 61.835) / 592.705) / (1 - (366.779 + 63.908) / 621.975)
=0.31998043 / 0.30754934
=1.0404

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
=861.086 / 899.515
=0.9573

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))
=(14.318 / (14.318 + 63.908)) / (14.932 / (14.932 + 61.835))
=0.18303377 / 0.19451066
=0.941

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)
=(280.019 / 861.086) / (275.863 / 899.515)
=0.32519284 / 0.30667971
=1.0604

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)
=((105.768 + 117.864) / 592.705) / ((132.604 + 148.022) / 621.975)
=0.37730743 / 0.45118534
=0.8363

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
=(14.517 - -0.195 - 42.294) / 592.705
=-0.0465

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.

Perry Ellis International Inc has a M-score of -2.60 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.

Perry Ellis International Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.84261.04991.10550.88340.90261.21650.84620.95730.94871.1157
GMI 0.98451.03280.98960.92411.08261.00910.98570.97490.95980.959
AQI 0.98021.01171.061.06590.94130.96060.8921.0270.95151.0404
SGI 1.0410.98550.88591.04781.24080.98870.94090.97561.01070.9573
DEPI 0.97030.87190.94071.01050.93370.89171.1931.08360.9110.941
SGAI 1.01211.11330.95491.0480.91071.07341.09851.01021.01551.0604
LVGI 0.83161.14420.86541.11290.85661.05661.02851.04340.9340.8363
TATA -0.1077-0.0085-0.13410.00560.0361-0.0815-0.0325-0.1348-0.052-0.0465
M-score -3.06-2.55-3.05-2.58-2.11-2.73-2.88-3.18-2.79-2.60

Perry Ellis International Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.92460.95731.10191.05060.84870.94870.96841.17251.08631.1157
GMI 0.96240.97490.97910.98740.97980.95980.93770.9380.94740.959
AQI 0.91281.0271.06661.07081.05280.95150.92260.96520.97391.0404
SGI 0.93070.97560.9911.01091.01631.01070.99480.97130.9650.9573
DEPI 1.06961.08361.07171.03990.97780.9110.93590.9220.92250.941
SGAI 1.05671.01020.99760.98190.99251.01551.03331.06961.10561.0604
LVGI 1.05661.04340.98520.96060.95360.9340.96180.89820.89210.8363
TATA -0.096-0.1348-0.1483-0.0956-0.111-0.052-0.0448-0.0882-0.1113-0.0465
M-score -3.14-3.18-3.06-2.83-3.10-2.79-2.79-2.79-2.98-2.60
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