Switch to:
Family Dollar Stores Inc (NYSE:FDO)
Beneish M-Score
-2.13 (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.

Family Dollar Stores Inc has a M-score of -2.13 signals that the company is a manipulator.

FDO' s 10-Year Beneish M-Score Range
Min: -3.79   Max: 12.24
Current: -2.13

-3.79
12.24

During the past 13 years, the highest Beneish M-Score of Family Dollar Stores Inc was 12.24. The lowest was -3.79. And the median was -2.58.


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 Family Dollar 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 * 1.843+0.528 * 1.0164+0.404 * 0.8263+0.892 * 1.0308+0.115 * 0.8785
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0252+4.679 * -0.0912-0.327 * 0.8256
=-2.13

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

This Year (May15) TTM:Last Year (May14) TTM:
Accounts Receivable was $73 Mil.
Revenue was 2728.176 + 2798.268 + 2556.422 + 2614.054 = $10,697 Mil.
Gross Profit was 943.165 + 931.087 + 852.947 + 861.297 = $3,588 Mil.
Total Current Assets was $2,171 Mil.
Total Assets was $3,933 Mil.
Property, Plant and Equipment(Net PPE) was $1,692 Mil.
Depreciation, Depletion and Amortization(DDA) was $284 Mil.
Selling, General & Admin. Expense(SGA) was $3,148 Mil.
Total Current Liabilities was $1,164 Mil.
Long-Term Debt was $299 Mil.
Net Income was 79.943 + 76.706 + 41.377 + 34.46 = $232 Mil.
Non Operating Income was 8.513 + 8.045 + 7.994 + 7.844 = $32 Mil.
Cash Flow from Operations was 239.837 + 195.945 + -93.144 + 216.161 = $559 Mil.
Accounts Receivable was $38 Mil.
Revenue was 2658.964 + 2716.621 + 2499.691 + 2502.266 = $10,378 Mil.
Gross Profit was 910.853 + 902.294 + 856.841 + 868.443 = $3,538 Mil.
Total Current Assets was $2,091 Mil.
Total Assets was $3,963 Mil.
Property, Plant and Equipment(Net PPE) was $1,787 Mil.
Depreciation, Depletion and Amortization(DDA) was $258 Mil.
Selling, General & Admin. Expense(SGA) was $2,978 Mil.
Total Current Liabilities was $1,301 Mil.
Long-Term Debt was $484 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)
=(72.649 / 10696.92) / (38.241 / 10377.542)
=0.00679158 / 0.00368498
=1.843

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)
=(931.087 / 10377.542) / (943.165 / 10696.92)
=0.34097005 / 0.33547002
=1.0164

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 - (2171.236 + 1691.739) / 3933.117) / (1 - (2090.659 + 1786.911) / 3963.104)
=0.01783369 / 0.02158258
=0.8263

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
=10696.92 / 10377.542
=1.0308

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))
=(258.261 / (258.261 + 1786.911)) / (283.988 / (283.988 + 1691.739))
=0.12627838 / 0.14373848
=0.8785

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)
=(3147.537 / 10696.92) / (2978.46 / 10377.542)
=0.29424704 / 0.28701016
=1.0252

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)
=((299.139 + 1163.842) / 3933.117) / ((484.188 + 1301.275) / 3963.104)
=0.37196478 / 0.45052136
=0.8256

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
=(232.486 - 32.396 - 558.799) / 3933.117
=-0.0912

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.

Family Dollar Stores Inc has a M-score of -2.13 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.

Family Dollar Stores Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
DSRI 1117.32950.15451.160601014.7354
GMI 1.02760.99310.9751.01150.96420.9761.00621.01541.02131.0161
AQI 1.6130.9310.94799.25010.85920.89120.8580.53041.00790.5359
SGI 1.10281.09791.06871.02181.05971.0631.08651.09161.11361.0094
DEPI 0.95880.90440.92880.97640.93210.98071.07440.99741.02960.8938
SGAI 1.04041.01661.03021.00241.01060.99020.98710.98880.99611.0444
LVGI 1.03161.31961.07360.94210.81081.05211.22330.90690.90840.9817
TATA -0.034-0.0836-0.0633-0.1049-0.0827-0.0792-0.04710.0083-0.0154-0.056
M-score -2.31-2.9312.24-0.37-2.69-3.79-2.74-3.43-2.400.51

Family Dollar Stores Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
DSRI 0.84521112.63498.79914.735411.83791.843
GMI 1.02421.02961.02131.01231.00150.99711.01611.02371.02211.0164
AQI 0.55420.68581.00790.83480.75360.71450.53590.75230.78210.8263
SGI 1.12871.12661.11361.09011.02511.01211.00941.00731.03261.0308
DEPI 1.02011.08111.02960.98030.96250.90790.89380.88320.86460.8785
SGAI 0.99610.99390.99611.00271.02871.04481.04441.0461.03051.0252
LVGI 0.96260.97160.90840.95040.98670.97710.98170.9350.89050.8256
TATA 0.0292-0.0122-0.0154-0.0292-0.0215-0.0197-0.056-0.0332-0.0646-0.0912
M-score -2.52-2.52-2.40-2.58-1.164.490.51-2.72-2.04-2.13
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK