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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 -4.74. And the median was -2.60.
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|
* 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
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)|
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)|
|=||(50.353 / 648.142)||/||(23.738 / 603.768)|
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 - (131.515 + 103.272) / 265.277)||/||(1 - (147.906 + 82.994) / 250.376)|
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))|
|=||(18.914 / (18.914 + 82.994))||/||(33.005 / (33.005 + 103.272))|
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)|
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)|
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|
|=||(79.961 - 0.856||-||66.883)||/||265.277|
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.
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