Switch to:
Family Dollar Stores Inc (NYSE:FDO)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

FDO' s 10-Year Beneish M-Score Range
Min: -3.79   Max: 12.24
Current: -2.72

-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 -2.61.


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+0.528 * 1.0237+0.404 * 0.7523+0.892 * 1.0073+0.115 * 0.8832
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.046+4.679 * -0.0332-0.327 * 0.935
=-2.72

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $44 Mil.
Revenue was 2556.422 + 2614.054 + 2658.964 + 2716.621 = $10,546 Mil.
Gross Profit was 852.947 + 861.297 + 910.853 + 902.294 = $3,527 Mil.
Total Current Assets was $2,247 Mil.
Total Assets was $4,032 Mil.
Property, Plant and Equipment(Net PPE) was $1,709 Mil.
Depreciation, Depletion and Amortization(DDA) was $273 Mil.
Selling, General & Admin. Expense(SGA) was $3,059 Mil.
Total Current Liabilities was $1,476 Mil.
Long-Term Debt was $299 Mil.
Net Income was 41.377 + 34.46 + 81.147 + 90.869 = $248 Mil.
Non Operating Income was 7.994 + 7.844 + 8.458 + 7.574 = $32 Mil.
Cash Flow from Operations was -93.144 + 216.161 + 141.077 + 85.791 = $350 Mil.
Accounts Receivable was $0 Mil.
Revenue was 2499.691 + 2502.266 + 2573.506 + 2893.997 = $10,469 Mil.
Gross Profit was 856.841 + 868.443 + 892.458 + 967.05 = $3,585 Mil.
Total Current Assets was $2,052 Mil.
Total Assets was $3,908 Mil.
Property, Plant and Equipment(Net PPE) was $1,759 Mil.
Depreciation, Depletion and Amortization(DDA) was $244 Mil.
Selling, General & Admin. Expense(SGA) was $2,903 Mil.
Total Current Liabilities was $1,356 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)
=(43.872 / 10546.061) / (0 / 10469.46)
=0.00416004 / 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)
=(861.297 / 10469.46) / (852.947 / 10546.061)
=0.34240467 / 0.33447474
=1.0237

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 - (2247.332 + 1709.237) / 4031.998) / (1 - (2051.513 + 1759.485) / 3908.182)
=0.0187076 / 0.02486681
=0.7523

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
=10546.061 / 10469.46
=1.0073

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))
=(244.044 / (244.044 + 1759.485)) / (273.429 / (273.429 + 1709.237))
=0.12180707 / 0.13790976
=0.8832

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)
=(3059.124 / 10546.061) / (2903.485 / 10469.46)
=0.29007266 / 0.27732901
=1.046

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)
=((299.064 + 1475.603) / 4031.998) / ((484.112 + 1355.704) / 3908.182)
=0.4401458 / 0.47076006
=0.935

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
=(247.853 - 31.87 - 349.885) / 4031.998
=-0.0332

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 -2.72 suggests that the company will not 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

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 000.84521112.63498.79914.73541
GMI 1.01541.01821.02421.02961.02131.01231.00150.99711.01611.0237
AQI 0.53040.55370.55420.68581.00790.83480.75360.71450.53590.7523
SGI 1.09161.10411.12871.12661.11361.09011.02511.01211.00941.0073
DEPI 0.99741.01821.02011.08111.02960.98030.96250.90790.89380.8832
SGAI 0.98880.99270.99610.99390.99611.00271.02871.04481.04441.046
LVGI 0.90690.96290.96260.97160.90840.95040.98670.97710.98170.935
TATA 0.00830.00210.0292-0.0122-0.0154-0.0292-0.0215-0.0197-0.056-0.0332
M-score -3.43-3.45-2.52-2.52-2.40-2.58-1.164.490.51-2.72
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