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Dollar Tree Inc (NAS:DLTR)
Beneish M-Score
6.05 (As of Today)

Warning Sign:

Beneish M-Score 6.05 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.

Dollar Tree Inc has a M-score of 6.05 signals that the company is a manipulator.

DLTR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.34   Max: 6.82
Current: 6.05

-6.34
6.82

During the past 13 years, the highest Beneish M-Score of Dollar Tree Inc was 6.82. The lowest was -6.34. And the median was -2.73.


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 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 * 1.1848+0.404 * 19.2191+0.892 * 2.0969+0.115 * 0.911
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9856+4.679 * 0.0023-0.327 * 0.7092
=6.05

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 5085.8 + 5365.3 + 4945.2 + 3011.2 = $18,408 Mil.
Gross Profit was 1554.6 + 1652.6 + 1400 + 855.2 = $5,462 Mil.
Total Current Assets was $4,172 Mil.
Total Assets was $16,061 Mil.
Property, Plant and Equipment(Net PPE) was $3,153 Mil.
Depreciation, Depletion and Amortization(DDA) was $597 Mil.
Selling, General & Admin. Expense(SGA) was $4,227 Mil.
Total Current Liabilities was $2,049 Mil.
Long-Term Debt was $7,210 Mil.
Net Income was 232.7 + 229 + 81.9 + -98 = $446 Mil.
Non Operating Income was 0.2 + -2.5 + -0.6 + -529.5 = $-532 Mil.
Cash Flow from Operations was 311 + 831.4 + -4.8 + -196.1 = $942 Mil.
Accounts Receivable was $0 Mil.
Revenue was 2176.7 + 2475.6 + 2095.2 + 2031.1 = $8,779 Mil.
Gross Profit was 748.9 + 918.1 + 725.3 + 694.1 = $3,086 Mil.
Total Current Assets was $9,336 Mil.
Total Assets was $10,869 Mil.
Property, Plant and Equipment(Net PPE) was $1,226 Mil.
Depreciation, Depletion and Amortization(DDA) was $208 Mil.
Selling, General & Admin. Expense(SGA) was $2,045 Mil.
Total Current Liabilities was $1,015 Mil.
Long-Term Debt was $7,820 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)
=(0 / 18407.5) / (0 / 8778.6)
=0 / 0
=1

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)
=(3086.4 / 8778.6) / (5462.4 / 18407.5)
=0.35158226 / 0.29674861
=1.1848

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 - (4172.1 + 3153.2) / 16060.9) / (1 - (9335.6 + 1226) / 10869.2)
=0.54390476 / 0.02830015
=19.2191

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
=18407.5 / 8778.6
=2.0969

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))
=(208 / (208 + 1226)) / (597.1 / (597.1 + 3153.2))
=0.14504881 / 0.15921393
=0.911

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)
=(4226.8 / 18407.5) / (2045.3 / 8778.6)
=0.22962379 / 0.23298704
=0.9856

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)
=((7209.8 + 2049.1) / 16060.9) / ((7819.7 + 1015.2) / 10869.2)
=0.576487 / 0.81283811
=0.7092

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
=(445.6 - -532.4 - 941.5) / 16060.9
=0.0023

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 6.05 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 own currency.

Dollar Tree Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1111111117.8059
GMI 1.01030.99281.00470.96571.00020.98940.99991.00821.00891.1739
AQI 1.09971.35070.86750.95111.09130.98150.9150.93530.76236.7513
SGI 1.16961.06881.09481.12621.12451.12721.11521.06031.09721.8017
DEPI 0.94071.03080.95141.02481.02061.071.07371.04051.02021.0772
SGAI 1.00631.01110.99060.97310.96450.97150.97330.99040.99871.0041
LVGI 1.12491.07530.88350.9781.03731.08520.95021.53550.84921.3276
TATA -0.1173-0.0929-0.0853-0.1138-0.0533-0.0852-0.0418-0.071-0.0921-0.0312
M-score -2.88-2.74-2.81-2.92-2.59-2.79-2.58-2.95-2.866.67

Dollar Tree Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 11111117.805911
GMI 1.01161.01591.01941.00881.00951.06021.13081.17391.18481.1089
AQI 0.94440.94341.10460.76230.27745.36054.76186.751319.21910.9936
SGI 1.05811.06041.0651.09721.10081.19721.50791.80172.09692.0897
DEPI 0.99810.98991.00441.02021.03082.02371.38231.07720.9110.4182
SGAI 0.99210.99410.99370.99881.00721.01311.01331.00410.98560.9726
LVGI 1.52861.52390.78350.84921.62521.28251.2931.32760.70920.916
TATA -0.0885-0.0778-0.057-0.0873-0.03020.01980.01820.0020.0023-0.0484
M-score -3.03-2.98-2.56-2.84-3.02-0.39-0.416.826.05-1.71
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