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Sturm Ruger & Co Inc (NYSE:RGR)
Beneish M-Score
-4.10 (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 -4.10 suggests that the company is not a manipulator.

RGR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.85   Max: -1.78
Current: -4.1

-4.85
-1.78

During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Co Inc was -1.78. The lowest was -4.85. 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 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 * 1.3386+0.528 * 1.0875+0.404 * 0.5491+0.892 * 0.8634+0.115 * 0.963
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7601+4.679 * -0.3087-0.327 * 1.3027
=-4.10

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $53.0 Mil.
Revenue was 120.871 + 140.872 + 136.954 + 122.605 = $521.3 Mil.
Gross Profit was 34.011 + 48.508 + 41.397 + 33.96 = $157.9 Mil.
Total Current Assets was $165.8 Mil.
Total Assets was $293.1 Mil.
Property, Plant and Equipment(Net PPE) was $108.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.6 Mil.
Selling, General & Admin. Expense(SGA) was $115.7 Mil.
Total Current Liabilities was $70.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 11.963 + 17.56 + 15.503 + -14.759 = $30.3 Mil.
Non Operating Income was 0.247 + 0.617 + 0.469 + -0.116 = $1.2 Mil.
Cash Flow from Operations was 14.085 + 48.081 + 32.783 + 24.597 = $119.5 Mil.
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.



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)
=(52.982 / 521.302) / (45.842 / 603.768)
=0.10163399 / 0.07592651
=1.3386

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)
=(48.508 / 603.768) / (34.011 / 521.302)
=0.32934173 / 0.3028494
=1.0875

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 - (165.757 + 108.866) / 293.121) / (1 - (131.515 + 103.272) / 265.277)
=0.06310704 / 0.11493646
=0.5491

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
=521.302 / 603.768
=0.8634

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))
=(33.005 / (33.005 + 103.272)) / (36.579 / (36.579 + 108.866))
=0.24219054 / 0.25149713
=0.963

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)
=(115.679 / 521.302) / (76.121 / 603.768)
=0.221904 / 0.12607657
=1.7601

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 + 70.504) / 293.121) / ((0 + 48.981) / 265.277)
=0.24052866 / 0.18464096
=1.3027

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
=(30.267 - 1.217 - 119.546) / 293.121
=-0.3087

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 -4.10 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.

Sturm Ruger & Co Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92331.05350.93011.42330.651.3381.03820.68111.11930.933
GMI 1.20431.17910.57581.06610.72870.98240.96820.93410.96841.2093
AQI 1.56511.02570.58681.81850.66210.81970.58161.87081.00461.5073
SGI 1.06251.08340.93361.15971.49320.94181.28841.49571.39940.7911
DEPI 0.92381.31450.86910.97310.93151.03240.94641.01381.09740.6734
SGAI 1.00980.90361.28280.90080.94051.01050.95950.910.88911.7203
LVGI 1.00951.37661.09421.31720.89070.90641.13651.41970.93310.7461
TATA -0.0285-0.2626-0.1391-0.0232-0.1389-0.0322-0.0899-0.1012-0.032-0.0707
M-score -2.31-3.55-3.74-1.78-3.25-2.42-2.84-2.61-2.13-2.82

Sturm Ruger & Co Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.82550.91961.11930.89590.79360.77090.9331.23791.41931.3386
GMI 0.95780.9550.96841.00741.06931.14511.20931.25961.18921.0875
AQI 1.18881.58791.00461.36141.58021.47761.50731.1370.75520.5491
SGI 1.46761.46211.39941.31171.13610.93150.79110.72840.73740.8634
DEPI 0.97050.94961.09740.95640.88010.76630.67340.76180.85110.963
SGAI 0.87460.86670.88880.85050.90571.01311.72031.80021.91741.7601
LVGI 1.66491.46320.93310.78250.66450.57680.74610.78821.10791.3027
TATA -0.1159-0.0231-0.03220.02170.05590.0461-0.0707-0.1643-0.2654-0.3087
M-score -2.91-2.17-2.13-1.95-1.90-2.16-2.82-3.18-3.78-4.10
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