Switch to:
GuruFocus has detected 4 Warning Signs with Sturm Ruger & Co Inc $RGR.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Sturm Ruger & Co Inc (NYSE:RGR)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

RGR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.97   Max: -1.78
Current: -2.67

-3.97
-1.78

During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Co Inc was -1.78. The lowest was -3.97. And the median was -2.64.


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 * 0.8032+0.528 * 0.9452+0.404 * 1.074+0.892 * 1.2055+0.115 * 1.0215
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9088+4.679 * -0.0535-0.327 * 0.8769
=-2.67

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $69.4 Mil.
Revenue was 161.848 + 161.427 + 167.944 + 173.109 = $664.3 Mil.
Gross Profit was 53.496 + 50.251 + 56.694 + 59.113 = $219.6 Mil.
Total Current Assets was $223.6 Mil.
Total Assets was $355.4 Mil.
Property, Plant and Equipment(Net PPE) was $104.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.4 Mil.
Selling, General & Admin. Expense(SGA) was $85.1 Mil.
Total Current Liabilities was $80.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 20.83 + 19.85 + 23.515 + 23.278 = $87.5 Mil.
Non Operating Income was 0.767 + 0.418 + 0.293 + 0.206 = $1.7 Mil.
Cash Flow from Operations was 19.409 + 19.3 + 36.662 + 29.429 = $104.8 Mil.
Accounts Receivable was $71.7 Mil.
Revenue was 152.396 + 120.871 + 140.872 + 136.954 = $551.1 Mil.
Gross Profit was 48.243 + 34.011 + 48.508 + 41.397 = $172.2 Mil.
Total Current Assets was $189.3 Mil.
Total Assets was $315.9 Mil.
Property, Plant and Equipment(Net PPE) was $103.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.2 Mil.
Selling, General & Admin. Expense(SGA) was $77.7 Mil.
Total Current Liabilities was $82.0 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)
=(69.442 / 664.328) / (71.721 / 551.093)
=0.10452969 / 0.13014319
=0.8032

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)
=(172.159 / 551.093) / (219.554 / 664.328)
=0.31239555 / 0.33049036
=0.9452

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 - (223.622 + 104.241) / 355.404) / (1 - (189.272 + 103.82) / 315.883)
=0.07749209 / 0.07215013
=1.074

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
=664.328 / 551.093
=1.2055

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))
=(36.235 / (36.235 + 103.82)) / (35.355 / (35.355 + 104.241))
=0.25871979 / 0.25326657
=1.0215

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)
=(85.149 / 664.328) / (77.727 / 551.093)
=0.12817313 / 0.14104153
=0.9088

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 + 80.893) / 355.404) / ((0 + 81.993) / 315.883)
=0.22760858 / 0.25956762
=0.8769

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
=(87.473 - 1.684 - 104.8) / 355.404
=-0.0535

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 -2.67 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 local exchange's currency.

Sturm Ruger & Co Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.93011.42330.651.3381.03820.68111.11930.9331.42470.8032
GMI 0.57581.06610.72870.98240.96820.93410.96841.20930.99460.9453
AQI 0.58681.81850.66210.81970.58161.87081.00461.50730.71841.074
SGI 0.93361.15971.49320.94181.28841.49571.39940.79111.01221.2055
DEPI 0.86910.97310.93151.03240.94641.01381.09740.67340.96271.0215
SGAI 1.28280.90080.94051.01050.95950.910.88911.72030.6710.9088
LVGI 1.09421.31720.89070.90641.13651.41970.93310.74611.09350.8769
TATA -0.1391-0.0232-0.1389-0.0322-0.0899-0.1012-0.032-0.0707-0.1651-0.0535
M-score -3.74-1.78-3.25-2.42-2.84-2.61-2.13-2.82-2.95-2.67

Sturm Ruger & Co Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.77090.9331.23791.41931.33861.42471.0330.97491.05660.8032
GMI 1.14511.20931.25961.18921.08750.99460.90360.91790.92550.9452
AQI 1.47761.50731.1370.75520.54910.71840.66211.00591.21511.074
SGI 0.93150.79110.72840.73740.86341.01221.1481.23171.25621.2055
DEPI 0.76630.67340.76180.85110.9630.96270.99310.9580.98911.0215
SGAI 1.01311.72031.80021.91741.76010.6710.66420.5830.58880.9088
LVGI 0.57680.74610.78821.10791.30271.09351.00560.89710.98170.8769
TATA 0.0461-0.0707-0.1643-0.2654-0.3087-0.1651-0.1252-0.0671-0.057-0.0535
M-score -2.16-2.82-3.18-3.78-4.10-2.95-3.04-2.55-2.34-2.67
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