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Beneish M-Score -0.36 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 Inc was -0.36. The lowest was -6.34. And the median was -2.73.
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 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 * 1.1308||+||0.404 * 4.7618||+||0.892 * 1.5079||+||0.115 * 1.3823|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0133||+||4.679 * 0.0278||-||0.327 * 1.293|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 4945.2 + 3011.2 + 2176.7 + 2475.6 = $12,609 Mil.
Gross Profit was 1400 + 855.2 + 748.9 + 918.1 = $3,922 Mil.
Total Current Assets was $4,628 Mil.
Total Assets was $16,699 Mil.
Property, Plant and Equipment(Net PPE) was $3,141 Mil.
Depreciation, Depletion and Amortization(DDA) was $367 Mil.
Selling, General & Admin. Expense(SGA) was $2,959 Mil.
Total Current Liabilities was $2,161 Mil.
Long-Term Debt was $8,248 Mil.
Net Income was 81.9 + -98 + 69.5 + 206.5 = $260 Mil.
Non Operating Income was -0.6 + -529.5 + 2.6 + -164.9 = $-692 Mil.
Cash Flow from Operations was -4.8 + -175.5 + 129.8 + 538.3 = $488 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 2095.2 + 2031.1 + 2000.3 + 2234.9 = $8,362 Mil.
Gross Profit was 725.3 + 694.1 + 696.6 + 825.2 = $2,941 Mil.
Total Current Assets was $1,796 Mil.
Total Assets was $3,368 Mil.
Property, Plant and Equipment(Net PPE) was $1,193 Mil.
Depreciation, Depletion and Amortization(DDA) was $202 Mil.
Selling, General & Admin. Expense(SGA) was $1,936 Mil.
Total Current Liabilities was $867 Mil.
Long-Term Debt was $757 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 / 12608.7)||/||(0 / 8361.5)|
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)|
|=||(855.2 / 8361.5)||/||(1400 / 12608.7)|
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 - (4628 + 3141) / 16699)||/||(1 - (1796.1 + 1193.4) / 3367.7)|
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))|
|=||(201.7 / (201.7 + 1193.4))||/||(366.9 / (366.9 + 3141))|
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)|
|=||(2958.7 / 12608.7)||/||(1936.4 / 8361.5)|
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)|
|=||((8248 + 2161.2) / 16699)||/||((757 + 866.5) / 3367.7)|
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|
|=||(259.9 - -692.4||-||487.8)||/||16699|
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 Inc has a M-score of -0.36 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 Inc Annual Data
Dollar Tree Inc Quarterly Data