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Family Dollar Stores Inc (NYSE:FDO)
Beneish M-Score
-2.04 (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 -2.04 signals that the company is a manipulator.

FDO' s 10-Year Beneish M-Score Range
Min: -3.79   Max: 12.24
Current: -2.04

-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 -2.60.


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 * 1.8378+0.528 * 1.0221+0.404 * 0.7821+0.892 * 1.0326+0.115 * 0.8646
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0305+4.679 * -0.0646-0.327 * 0.8905
=-2.04

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

This Year (Feb15) TTM:Last Year (Feb14) TTM:
Accounts Receivable was $66 Mil.
Revenue was 2798.268 + 2556.422 + 2614.054 + 2658.964 = $10,628 Mil.
Gross Profit was 931.087 + 852.947 + 861.297 + 910.853 = $3,556 Mil.
Total Current Assets was $2,245 Mil.
Total Assets was $4,005 Mil.
Property, Plant and Equipment(Net PPE) was $1,688 Mil.
Depreciation, Depletion and Amortization(DDA) was $281 Mil.
Selling, General & Admin. Expense(SGA) was $3,102 Mil.
Total Current Liabilities was $1,364 Mil.
Long-Term Debt was $299 Mil.
Net Income was 76.706 + 41.377 + 34.46 + 81.147 = $234 Mil.
Non Operating Income was 8.045 + 7.994 + 7.844 + 8.458 = $32 Mil.
Cash Flow from Operations was 195.945 + -93.144 + 216.161 + 141.077 = $460 Mil.
Accounts Receivable was $35 Mil.
Revenue was 2716.621 + 2499.691 + 2502.266 + 2573.506 = $10,292 Mil.
Gross Profit was 902.294 + 856.841 + 868.443 + 892.458 = $3,520 Mil.
Total Current Assets was $2,132 Mil.
Total Assets was $4,003 Mil.
Property, Plant and Equipment(Net PPE) was $1,778 Mil.
Depreciation, Depletion and Amortization(DDA) was $250 Mil.
Selling, General & Admin. Expense(SGA) was $2,915 Mil.
Total Current Liabilities was $1,382 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)
=(65.984 / 10627.708) / (34.769 / 10292.084)
=0.00620868 / 0.00337823
=1.8378

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)
=(852.947 / 10292.084) / (931.087 / 10627.708)
=0.34201392 / 0.33461439
=1.0221

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 - (2244.513 + 1687.799) / 4004.993) / (1 - (2131.766 + 1778.153) / 4002.804)
=0.0181476 / 0.02320498
=0.7821

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
=10627.708 / 10292.084
=1.0326

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))
=(250.347 / (250.347 + 1778.153)) / (281.042 / (281.042 + 1687.799))
=0.12341484 / 0.14274489
=0.8646

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)
=(3102.396 / 10627.708) / (2915.449 / 10292.084)
=0.29191581 / 0.28327101
=1.0305

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)
=((299.101 + 1363.51) / 4004.993) / ((484.15 + 1381.943) / 4002.804)
=0.41513456 / 0.46619645
=0.8905

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
=(233.69 - 32.341 - 460.039) / 4004.993
=-0.0646

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 -2.04 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

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
DSRI 00.84521112.63498.79914.735411.8379
GMI 1.01821.02421.02961.02131.01231.00150.99711.01611.02371.0221
AQI 0.55370.55420.68581.00790.83480.75360.71450.53590.75230.7821
SGI 1.10411.12871.12661.11361.09011.02511.01211.00941.00731.0326
DEPI 1.01821.02011.08111.02960.98030.96250.90790.89380.88320.8646
SGAI 0.99270.99610.99390.99611.00271.02871.04481.04441.0461.0305
LVGI 0.96290.96260.97160.90840.95040.98670.97710.98170.9350.8905
TATA 0.00210.0292-0.0122-0.0154-0.0292-0.0215-0.0197-0.056-0.0332-0.0646
M-score -3.45-2.52-2.52-2.40-2.58-1.164.490.51-2.72-2.04
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