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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.
During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Co Inc was -1.78. The lowest was -3.76. And the median was -2.61.
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 * 0.933||+||0.528 * 1.2093||+||0.404 * 1.5073||+||0.892 * 0.7911||+||0.115 * 0.6734|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.7203||+||4.679 * -0.0707||-||0.327 * 0.7461|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $49.7 Mil.|
Revenue was 122.605 + 98.327 + 153.657 + 169.884 = $544.5 Mil.
Gross Profit was 33.96 + 23.738 + 50.353 + 61.123 = $169.2 Mil.
Total Current Assets was $118.2 Mil.
Total Assets was $254.4 Mil.
Property, Plant and Equipment(Net PPE) was $110.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.7 Mil.
Selling, General & Admin. Expense(SGA) was $114.4 Mil.
Total Current Liabilities was $60.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -14.759 + 6.781 + 22.286 + 24.319 = $38.6 Mil.
Non Operating Income was -0.116 + 0.673 + 0.13 + 0.365 = $1.1 Mil.
Cash Flow from Operations was 24.597 + -4.622 + 19.866 + 15.71 = $55.6 Mil.
|Accounts Receivable was $67.4 Mil.
Revenue was 181.9 + 170.942 + 179.528 + 155.905 = $688.3 Mil.
Gross Profit was 63.632 + 62.94 + 70.724 + 61.309 = $258.6 Mil.
Total Current Assets was $157.6 Mil.
Total Assets was $277.1 Mil.
Property, Plant and Equipment(Net PPE) was $101.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.4 Mil.
Selling, General & Admin. Expense(SGA) was $84.1 Mil.
Total Current Liabilities was $88.2 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(49.735 / 544.473)||/||(67.384 / 688.275)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(23.738 / 688.275)||/||(33.96 / 544.473)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (118.174 + 110.661) / 254.382)||/||(1 - (157.626 + 101.028) / 277.118)|
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.
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))|
|=||(20.362 / (20.362 + 101.028))||/||(36.706 / (36.706 + 110.661))|
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)|
|=||(114.449 / 544.473)||/||(84.099 / 688.275)|
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 + 60.382) / 254.382)||/||((0 + 88.166) / 277.118)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(38.627 - 1.052||-||55.551)||/||254.382|
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 -2.82 suggests that the company will not be a manipulator.
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
Sturm Ruger & Co Inc Annual Data
Sturm Ruger & Co Inc Quarterly Data