Switch to:
Office Depot Inc (NAS:ODP)
Beneish M-Score
-2.55 (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.

Office Depot Inc has a M-score of -2.55 suggests that the company is not a manipulator.

ODP' s Beneish M-Score Range Over the Past 10 Years
Min: -5.36   Max: -0.4
Current: -2.55

-5.36
-0.4

During the past 13 years, the highest Beneish M-Score of Office Depot Inc was -0.40. The lowest was -5.36. And the median was -2.71.


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 Office Depot 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 * 1.0164+0.528 * 0.9797+0.404 * 1.0405+0.892 * 0.906+0.115 * 0.9986
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9626+4.679 * -0.004-0.327 * 0.9856
=-2.55

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,106 Mil.
Revenue was 3544 + 3478 + 3690 + 3440 = $14,152 Mil.
Gross Profit was 856 + 814 + 936 + 814 = $3,420 Mil.
Total Current Assets was $3,696 Mil.
Total Assets was $6,034 Mil.
Property, Plant and Equipment(Net PPE) was $754 Mil.
Depreciation, Depletion and Amortization(DDA) was $264 Mil.
Selling, General & Admin. Expense(SGA) was $2,981 Mil.
Total Current Liabilities was $2,315 Mil.
Long-Term Debt was $1,437 Mil.
Net Income was 46 + 15 + 6 + -58 = $9 Mil.
Non Operating Income was 0 + 0 + -1 + 1 = $0 Mil.
Cash Flow from Operations was -139 + 126 + 135 + -89 = $33 Mil.
Accounts Receivable was $1,201 Mil.
Revenue was 3877 + 3833 + 4069 + 3841 = $15,620 Mil.
Gross Profit was 937 + 891 + 987 + 883 = $3,698 Mil.
Total Current Assets was $4,009 Mil.
Total Assets was $6,548 Mil.
Property, Plant and Equipment(Net PPE) was $887 Mil.
Depreciation, Depletion and Amortization(DDA) was $310 Mil.
Selling, General & Admin. Expense(SGA) was $3,418 Mil.
Total Current Liabilities was $2,639 Mil.
Long-Term Debt was $1,492 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)
=(1106 / 14152) / (1201 / 15620)
=0.0781515 / 0.0768886
=1.0164

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)
=(814 / 15620) / (856 / 14152)
=0.23674776 / 0.24166196
=0.9797

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 - (3696 + 754) / 6034) / (1 - (4009 + 887) / 6548)
=0.26251243 / 0.25229078
=1.0405

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
=14152 / 15620
=0.906

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))
=(310 / (310 + 887)) / (264 / (264 + 754))
=0.25898079 / 0.25933202
=0.9986

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)
=(2981 / 14152) / (3418 / 15620)
=0.21064161 / 0.21882202
=0.9626

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)
=((1437 + 2315) / 6034) / ((1492 + 2639) / 6548)
=0.62180974 / 0.63087966
=0.9856

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
=(9 - 0 - 33) / 6034
=-0.004

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.

Office Depot Inc has a M-score of -2.55 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.

Office Depot Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.14290.98720.88981.06570.89740.90641.0011.57740.66231.0251
GMI 0.98921.07231.04940.98930.96790.96770.98221.29990.99570.9703
AQI 1.25071.04370.41530.74381.01261.22961.10372.07551.03851.0073
SGI 1.05131.03440.93350.83780.95790.98770.93091.05111.43180.8999
DEPI 1.03641.08841.07250.940.97810.92270.8621.39330.56130.9257
SGAI 0.92870.9861.08161.06590.96121.02751.01580.75920.97130.9495
LVGI 1.0840.91391.2751.00461.03990.96480.99510.94891.08731.0005
TATA -0.0512-0.0061-0.3745-0.1861-0.0618-0.0317-0.0694-0.0413-0.0755-0.0185
M-score -2.46-2.39-4.70-3.56-2.92-2.65-2.85-1.40-2.82-2.65

Office Depot Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.57741.40711.27861.080.66220.75470.84320.99881.02511.0164
GMI 1.0151.02521.02061.01070.99580.97770.97310.9670.97050.9797
AQI 2.07551.92011.97025.60111.03851.05221.05961.00861.00731.0405
SGI 1.0511.22171.3681.51751.43191.21291.06430.94220.89990.906
DEPI 1.39231.16050.99650.87070.56130.65460.73420.84730.92570.9986
SGAI 0.99430.97831.01010.99470.9750.98290.92980.94670.94930.9626
LVGI 0.94890.97110.98241.0051.08731.05311.00381.01141.00050.9856
TATA -0.0412-0.0598-0.0664-0.0646-0.0756-0.0588-0.0401-0.0331-0.0185-0.004
M-score -1.59-1.77-1.80-0.40-2.82-2.84-2.76-2.71-2.65-2.55
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)
FEEDBACK