Switch to:
Sturm Ruger & Co Inc (NYSE:RGR)
Beneish M-Score
-2.16 (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.

Sturm Ruger & Co Inc has a M-score of -2.16 signals that the company is a manipulator.

RGR' s 10-Year Beneish M-Score Range
Min: -4.74   Max: -1.78
Current: -2.16

-4.74
-1.78

During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Co Inc was -1.78. The lowest was -4.74. 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 Sturm Ruger & Co 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 * 0.7709+0.528 * 1.1451+0.404 * 1.4776+0.892 * 0.9315+0.115 * 0.7663
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0131+4.679 * 0.0461-0.327 * 0.5768
=-2.16

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $45.8 Mil.
Revenue was 98.327 + 153.657 + 169.884 + 181.9 = $603.8 Mil.
Gross Profit was 23.738 + 50.353 + 61.123 + 63.632 = $198.8 Mil.
Total Current Assets was $131.5 Mil.
Total Assets was $265.3 Mil.
Property, Plant and Equipment(Net PPE) was $103.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.0 Mil.
Selling, General & Admin. Expense(SGA) was $76.1 Mil.
Total Current Liabilities was $49.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 6.781 + 22.286 + 24.319 + 26.575 = $80.0 Mil.
Non Operating Income was 0.673 + 0.13 + 0.365 + -0.312 = $0.9 Mil.
Cash Flow from Operations was -4.622 + 19.866 + 15.71 + 35.929 = $66.9 Mil.
Accounts Receivable was $63.8 Mil.
Revenue was 170.942 + 179.528 + 155.905 + 141.767 = $648.1 Mil.
Gross Profit was 62.94 + 70.724 + 61.309 + 49.461 = $244.4 Mil.
Total Current Assets was $147.9 Mil.
Total Assets was $250.4 Mil.
Property, Plant and Equipment(Net PPE) was $83.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.9 Mil.
Selling, General & Admin. Expense(SGA) was $80.7 Mil.
Total Current Liabilities was $80.1 Mil.
Long-Term Debt was $0.0 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)
=(45.842 / 603.768) / (63.833 / 648.142)
=0.07592651 / 0.09848613
=0.7709

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)
=(50.353 / 648.142) / (23.738 / 603.768)
=0.37713032 / 0.32934173
=1.1451

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 - (131.515 + 103.272) / 265.277) / (1 - (147.906 + 82.994) / 250.376)
=0.11493646 / 0.07778701
=1.4776

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
=603.768 / 648.142
=0.9315

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))
=(18.914 / (18.914 + 82.994)) / (33.005 / (33.005 + 103.272))
=0.18559878 / 0.24219054
=0.7663

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)
=(76.121 / 603.768) / (80.659 / 648.142)
=0.12607657 / 0.12444649
=1.0131

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)
=((0 + 48.981) / 265.277) / ((0 + 80.144) / 250.376)
=0.18464096 / 0.32009458
=0.5768

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
=(79.961 - 0.856 - 66.883) / 265.277
=0.0461

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.

Sturm Ruger & Co Inc has a M-score of -2.16 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.

Sturm Ruger & Co Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.27480.92331.05350.93011.42330.651.3381.03820.68111.1193
GMI 1.14351.20431.17910.57581.06610.72870.98240.96820.93410.9684
AQI 0.95721.56511.02570.58681.81850.66210.81970.58161.87081.0046
SGI 0.98451.06251.08340.93361.15971.49320.94181.28841.49571.3994
DEPI 1.02610.92381.31450.86910.97310.93151.03240.94641.01381.0974
SGAI 1.10561.00980.90361.28280.90080.94051.01050.95950.910.8891
LVGI 0.97471.00951.37661.09421.31720.89070.90641.13651.41970.9331
TATA 0.0169-0.0285-0.2626-0.1391-0.0232-0.1389-0.0322-0.0899-0.1012-0.032
M-score -2.11-2.31-3.55-3.74-1.78-3.25-2.42-2.84-2.61-2.13

Sturm Ruger & Co Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.01670.96040.68110.82880.82550.91961.11930.89590.79360.7709
GMI 0.91510.9460.93410.95570.95780.9550.96841.00741.06931.1451
AQI 0.72770.72011.87081.77121.18881.58791.00461.36141.58021.4776
SGI 1.46131.47911.49571.4641.46761.46211.39941.31171.13610.9315
DEPI 1.0531.10011.01381.0320.97050.94961.09740.95640.88010.7663
SGAI 0.94090.9130.91030.91620.87460.86670.88880.85050.90571.0131
LVGI 0.99561.04211.41971.62071.66491.46320.93310.78250.66450.5768
TATA -0.0398-0.0661-0.1012-0.0855-0.1159-0.0231-0.03220.02170.05590.0461
M-score -2.38-2.53-2.61-2.52-2.91-2.17-2.13-1.95-1.90-2.16
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