Switch to:
Family Dollar Stores Inc (NYSE:FDO)
Beneish M-Score
0.51 (As of Today)

Warning Sign:

Beneish M-Score 0.51 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.

Family Dollar Stores Inc has a M-score of 0.51 signals that the company is a manipulator.

FDO' s 10-Year Beneish M-Score Range
Min: -3.79   Max: 12.24
Current: 0.51

-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 -2.67.


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 * 4.7354+0.528 * 1.0161+0.404 * 0.5359+0.892 * 1.0094+0.115 * 0.8938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0444+4.679 * -0.056-0.327 * 0.9817
=0.51

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $64 Mil.
Revenue was 2614.054 + 2658.964 + 2716.621 + 2499.691 = $10,489 Mil.
Gross Profit was 861.297 + 910.853 + 902.294 + 856.841 = $3,531 Mil.
Total Current Assets was $2,102 Mil.
Total Assets was $3,857 Mil.
Property, Plant and Equipment(Net PPE) was $1,688 Mil.
Depreciation, Depletion and Amortization(DDA) was $265 Mil.
Selling, General & Admin. Expense(SGA) was $3,022 Mil.
Total Current Liabilities was $1,129 Mil.
Long-Term Debt was $484 Mil.
Net Income was 34.46 + 81.147 + 90.869 + 78.027 = $285 Mil.
Non Operating Income was 7.844 + 8.458 + 7.574 + 7.464 = $31 Mil.
Cash Flow from Operations was 216.161 + 141.077 + 85.791 + 26.133 = $469 Mil.
Accounts Receivable was $13 Mil.
Revenue was 2502.266 + 2573.506 + 2893.997 + 2421.688 = $10,391 Mil.
Gross Profit was 868.443 + 892.458 + 967.05 + 826.794 = $3,555 Mil.
Total Current Assets was $1,857 Mil.
Total Assets was $3,710 Mil.
Property, Plant and Equipment(Net PPE) was $1,733 Mil.
Depreciation, Depletion and Amortization(DDA) was $239 Mil.
Selling, General & Admin. Expense(SGA) was $2,867 Mil.
Total Current Liabilities was $1,080 Mil.
Long-Term Debt was $500 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)
=(64.458 / 10489.33) / (13.485 / 10391.457)
=0.0061451 / 0.0012977
=4.7354

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)
=(910.853 / 10391.457) / (861.297 / 10489.33)
=0.34208341 / 0.33665496
=1.0161

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 - (2102.046 + 1688.213) / 3857.295) / (1 - (1857.005 + 1732.544) / 3709.861)
=0.01737902 / 0.03243033
=0.5359

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
=10489.33 / 10391.457
=1.0094

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))
=(239.485 / (239.485 + 1732.544)) / (265.461 / (265.461 + 1688.213))
=0.12144091 / 0.13587784
=0.8938

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)
=(3022.219 / 10489.33) / (2866.788 / 10391.457)
=0.28812317 / 0.27587931
=1.0444

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)
=((484.226 + 1129.03) / 3857.295) / ((500.275 + 1080.222) / 3709.861)
=0.41823506 / 0.42602593
=0.9817

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
=(284.503 - 31.34 - 469.162) / 3857.295
=-0.056

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 0.51 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

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1000.84521112.63498.79914.7354
GMI 1.01891.01541.01821.02421.02961.02131.01231.00150.99711.0161
AQI 0.74250.53040.55370.55420.68581.00790.83480.75360.71450.5359
SGI 1.08731.09161.10411.12871.12661.11361.09011.02511.01211.0094
DEPI 1.05410.99741.01821.02011.08111.02960.98030.96250.90790.8938
SGAI 0.97840.98880.99270.99610.99390.99611.00271.02871.04481.0444
LVGI 0.92760.90690.96290.96260.97160.90840.95040.98670.97710.9817
TATA -0.02170.00830.00210.0292-0.0122-0.0154-0.0292-0.0215-0.0197-0.056
M-score -2.56-3.43-3.45-2.52-2.52-2.40-2.58-1.164.490.51
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)
Free 7-day Trial
FEEDBACK