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GuruFocus has detected 4 Warning Signs with Tiffany & Co $TIF.
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Tiffany & Co (NYSE:TIF)
Beneish M-Score
-2.75 (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.

Tiffany & Co has a M-score of -2.75 suggests that the company is not a manipulator.

TIF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12   Max: -1.36
Current: -2.75

-3.12
-1.36

During the past 13 years, the highest Beneish M-Score of Tiffany & Co was -1.36. The lowest was -3.12. And the median was -2.35.


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 Tiffany & Co 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 * 1.0586+0.528 * 0.9804+0.404 * 0.8761+0.892 * 0.9941+0.115 * 0.9719
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0215+4.679 * -0.0555-0.327 * 0.9781
=-2.75

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

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $233 Mil.
Revenue was 899.6 + 1229.6 + 949.3 + 931.6 = $4,010 Mil.
Gross Profit was 557.6 + 788.2 + 579.5 + 577.1 = $2,502 Mil.
Total Current Assets was $3,595 Mil.
Total Assets was $5,106 Mil.
Property, Plant and Equipment(Net PPE) was $921 Mil.
Depreciation, Depletion and Amortization(DDA) was $207 Mil.
Selling, General & Admin. Expense(SGA) was $1,770 Mil.
Total Current Liabilities was $583 Mil.
Long-Term Debt was $881 Mil.
Net Income was 92.9 + 157.8 + 95.1 + 105.7 = $452 Mil.
Non Operating Income was 0 + 1.4 + 0 + 0 = $1 Mil.
Cash Flow from Operations was 113.7 + 298.5 + 197.6 + 123.8 = $734 Mil.
Accounts Receivable was $222 Mil.
Revenue was 891.3 + 1213.7 + 938.2 + 990.5 = $4,034 Mil.
Gross Profit was 545.6 + 764.8 + 564.5 + 593 = $2,468 Mil.
Total Current Assets was $3,522 Mil.
Total Assets was $5,148 Mil.
Property, Plant and Equipment(Net PPE) was $946 Mil.
Depreciation, Depletion and Amortization(DDA) was $206 Mil.
Selling, General & Admin. Expense(SGA) was $1,743 Mil.
Total Current Liabilities was $718 Mil.
Long-Term Debt was $790 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)
=(233.1 / 4010.1) / (221.5 / 4033.7)
=0.05812823 / 0.05491236
=1.0586

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)
=(2467.9 / 4033.7) / (2502.4 / 4010.1)
=0.61182041 / 0.62402434
=0.9804

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 - (3594.5 + 920.8) / 5106.2) / (1 - (3522.2 + 946) / 5148.2)
=0.11572206 / 0.132085
=0.8761

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
=4010.1 / 4033.7
=0.9941

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))
=(205.7 / (205.7 + 946)) / (207.3 / (207.3 + 920.8))
=0.17860554 / 0.1837603
=0.9719

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)
=(1770.2 / 4010.1) / (1743.2 / 4033.7)
=0.44143538 / 0.43215906
=1.0215

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)
=((880.5 + 582.5) / 5106.2) / ((790.2 + 717.8) / 5148.2)
=0.28651443 / 0.29291791
=0.9781

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
=(451.5 - 1.4 - 733.6) / 5106.2
=-0.0555

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.

Tiffany & Co has a M-score of -2.75 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.

Tiffany & Co Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.03020.87371.01561.02910.83830.90751.02140.98061.09471.1271
GMI 1.02090.97251.02320.95611.00021.03570.9820.97250.98370.9753
AQI 1.38170.9151.01761.00681.16991.18120.98691.05920.88720.8783
SGI 1.1370.97030.95031.13861.18071.04151.06241.05430.96590.9749
DEPI 0.76850.94270.91610.93021.13740.95950.95520.98210.99810.9729
SGAI 1.03750.99090.98980.98930.99540.97570.99891.00331.0891.0483
LVGI 1.02471.07050.96940.89090.97941.04211.04370.9760.9980.999
TATA -0.05390.0248-0.12070.01670.05370.00710.0028-0.0014-0.068-0.0505
M-score -2.46-2.58-3.05-2.24-2.12-2.42-2.43-2.44-2.81-2.70

Tiffany & Co Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 0.98060.97690.95131.18891.09471.19811.26751.08581.12711.0586
GMI 0.97250.97640.98620.99260.98370.97940.9710.97030.97530.9804
AQI 1.05921.11661.15781.08090.88720.88670.90721.01920.87830.8761
SGI 1.05431.01260.9960.97970.96590.96040.94690.95440.97490.9941
DEPI 0.98211.01911.0220.99850.99810.99220.98580.99080.97290.9719
SGAI 1.00331.0451.06261.05981.0891.09011.07261.07061.04831.0215
LVGI 0.9760.98391.00080.95630.9981.03241.01271.01510.9990.9781
TATA -0.0014-0.0248-0.0458-0.0717-0.068-0.0591-0.0512-0.0656-0.0505-0.0555
M-score -2.44-2.57-2.69-2.63-2.81-2.69-2.59-2.77-2.70-2.75
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