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

Warning Sign:

Beneish M-Score 6.32 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 6.32 signals that the company is a manipulator.

DLTR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.34   Max: 6.32
Current: 6.32

-6.34
6.32

During the past 13 years, the highest Beneish M-Score of Dollar Tree Inc was 6.32. 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 * 7.8059+0.528 * 1.1739+0.404 * 5.4793+0.892 * 1.8017+0.115 * 1.0772
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0041+4.679 * 0.002-0.327 * 1.2936
=6.32

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $155 Mil.
Revenue was 5365.3 + 4945.2 + 3011.2 + 2176.7 = $15,498 Mil.
Gross Profit was 1652.6 + 1400 + 855.2 + 748.9 = $4,657 Mil.
Total Current Assets was $3,936 Mil.
Total Assets was $15,901 Mil.
Property, Plant and Equipment(Net PPE) was $3,126 Mil.
Depreciation, Depletion and Amortization(DDA) was $488 Mil.
Selling, General & Admin. Expense(SGA) was $3,607 Mil.
Total Current Liabilities was $2,095 Mil.
Long-Term Debt was $7,238 Mil.
Net Income was 229 + 81.9 + -98 + 69.5 = $282 Mil.
Non Operating Income was -2.4 + -0.6 + -529.5 + 2.6 = $-530 Mil.
Cash Flow from Operations was 831.4 + -4.8 + -175.5 + 129.8 = $781 Mil.
Accounts Receivable was $11 Mil.
Revenue was 2475.6 + 2095.2 + 2031.1 + 2000.3 = $8,602 Mil.
Gross Profit was 918.1 + 725.3 + 694.1 + 696.6 = $3,034 Mil.
Total Current Assets was $1,995 Mil.
Total Assets was $3,567 Mil.
Property, Plant and Equipment(Net PPE) was $1,211 Mil.
Depreciation, Depletion and Amortization(DDA) was $206 Mil.
Selling, General & Admin. Expense(SGA) was $1,994 Mil.
Total Current Liabilities was $862 Mil.
Long-Term Debt was $757 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)
=(154.7 / 15498.4) / (11 / 8602.2)
=0.00998168 / 0.00127874
=7.8059

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)
=(1400 / 8602.2) / (1652.6 / 15498.4)
=0.3527121 / 0.30046327
=1.1739

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 - (3935.9 + 3125.5) / 15901.2) / (1 - (1994.6 + 1210.5) / 3567)
=0.55592031 / 0.10145781
=5.4793

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
=15498.4 / 8602.2
=1.8017

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))
=(205.9 / (205.9 + 1210.5)) / (487.6 / (487.6 + 3125.5))
=0.14536854 / 0.13495336
=1.0772

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)
=(3607.1 / 15498.4) / (1993.9 / 8602.2)
=0.23274015 / 0.23178954
=1.0041

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)
=((7238.4 + 2095.4) / 15901.2) / ((757 + 861.6) / 3567)
=0.58698715 / 0.45377068
=1.2936

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
=(282.4 - -529.9 - 780.9) / 15901.2
=0.002

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 6.32 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 1.09971.35070.86750.95111.09130.98150.9150.93530.93935.4793
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 1.12491.07530.88350.9781.03731.08520.95021.53550.87151.2936
TATA -0.1173-0.0929-0.0853-0.1138-0.0533-0.0852-0.0436-0.0707-0.0453-0.0312
M-score -2.88-2.74-2.81-2.92-2.59-2.79-2.59-2.95-2.586.16

Dollar Tree Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 111111117.80591
GMI 1.00821.01161.01591.01941.00881.00951.06021.13081.17391.1848
AQI 0.93530.95590.98861.10460.93930.2745.1154.76185.479319.2191
SGI 1.06031.05811.06041.0651.09721.10081.19721.50791.80172.0969
DEPI 1.04050.99810.98991.00441.02021.03082.02371.38231.07720.911
SGAI 0.99040.99210.99410.99370.99881.00721.01311.01331.00410.9856
LVGI 1.53551.53071.53240.78350.87151.62291.27531.2931.29360.7092
TATA -0.0707-0.0881-0.0825-0.0618-0.0453-0.01510.02950.02780.0020.001
M-score -2.95-3.02-2.98-2.59-2.58-2.95-0.45-0.366.326.05
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