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Beneish M-Score -0.55 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of Dollar Tree Stores Inc was -0.55. The lowest was -3.66. And the median was -2.72.
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 Dollar Tree Stores 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||+||0.528 * 1.0602||+||0.404 * 5.3605||+||0.892 * 1.1972||+||0.115 * 2.0237|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0131||+||4.679 * -0.013||-||0.327 * 1.2825|
|This Year (Jul15) TTM:||Last Year (Jul14) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 3011.2 + 2176.7 + 2475.6 + 2095.2 = $9,759 Mil.
Gross Profit was 855.2 + 748.9 + 918.1 + 725.3 = $3,248 Mil.
Total Current Assets was $4,525 Mil.
Total Assets was $16,565 Mil.
Property, Plant and Equipment(Net PPE) was $3,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $248 Mil.
Selling, General & Admin. Expense(SGA) was $2,288 Mil.
Total Current Liabilities was $2,073 Mil.
Long-Term Debt was $8,266 Mil.
Net Income was -98 + 69.5 + 206.5 + 133 = $311 Mil.
Non Operating Income was 1.7 + 2.6 + 7.1 + -1.1 = $10 Mil.
Cash Flow from Operations was -175.5 + 129.8 + 538.3 + 23.2 = $516 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 2031.1 + 2000.3 + 2234.9 + 1884.7 = $8,151 Mil.
Gross Profit was 694.1 + 696.6 + 825.2 + 659.9 = $2,876 Mil.
Total Current Assets was $1,663 Mil.
Total Assets was $3,130 Mil.
Property, Plant and Equipment(Net PPE) was $1,153 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $1,886 Mil.
Total Current Liabilities was $783 Mil.
Long-Term Debt was $740 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 9758.7)||/||(0 / 8151)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(748.9 / 8151)||/||(855.2 / 9758.7)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (4524.7 + 3151.9) / 16565.1)||/||(1 - (1663.2 + 1153.4) / 3129.9)|
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.
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))|
|=||(199.4 / (199.4 + 1153.4))||/||(247.6 / (247.6 + 3151.9))|
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)|
|=||(2288 / 9758.7)||/||(1886.4 / 8151)|
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)|
|=||((8265.5 + 2073.3) / 16565.1)||/||((740.2 + 783) / 3129.9)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(311 - 10.3||-||515.8)||/||16565.1|
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.
Dollar Tree Stores Inc has a M-score of -0.55 signals that the company is likely to be a manipulator.
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
Dollar Tree Stores Inc Annual Data
Dollar Tree Stores Inc Quarterly Data