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Sturm Ruger & Company (NYSE:RGR)
Beneish M-Score
-1.95 (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 & Company has a M-score of -1.90 signals that the company is a manipulator.

RGR' s 10-Year Beneish M-Score Range
Min: -4.72   Max: -1.78
Current: -1.95

-4.72
-1.78

During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Company was -1.78. The lowest was -4.72. 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 & Company 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 * 0.7936+0.528 * 1.0693+0.404 * 1.5802+0.892 * 1.1361+0.115 * 0.8801
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9057+4.679 * 0.0559-0.327 * 0.6645
=-1.90

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $51.7 Mil.
Revenue was 153.657 + 169.884 + 181.9 + 170.942 = $676.4 Mil.
Gross Profit was 50.353 + 61.123 + 63.632 + 62.94 = $238.0 Mil.
Total Current Assets was $150.4 Mil.
Total Assets was $283.7 Mil.
Property, Plant and Equipment(Net PPE) was $106.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.8 Mil.
Selling, General & Admin. Expense(SGA) was $80.2 Mil.
Total Current Liabilities was $65.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 22.286 + 24.319 + 26.575 + 28.671 = $101.9 Mil.
Non Operating Income was 0.13 + 0.365 + -0.312 + 0.408 = $0.6 Mil.
Cash Flow from Operations was 19.866 + 15.71 + 35.929 + 13.901 = $85.4 Mil.
Accounts Receivable was $57.3 Mil.
Revenue was 179.528 + 155.905 + 141.767 + 118.152 = $595.4 Mil.
Gross Profit was 70.724 + 61.309 + 49.461 + 42.565 = $224.1 Mil.
Total Current Assets was $146.4 Mil.
Total Assets was $236.5 Mil.
Property, Plant and Equipment(Net PPE) was $75.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.5 Mil.
Selling, General & Admin. Expense(SGA) was $78.0 Mil.
Total Current Liabilities was $82.4 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)
=(51.704 / 676.383) / (57.344 / 595.352)
=0.0764419 / 0.09631949
=0.7936

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)
=(61.123 / 595.352) / (50.353 / 676.383)
=0.3763471 / 0.35194261
=1.0693

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 - (150.412 + 106.056) / 283.69) / (1 - (146.38 + 75.799) / 236.543)
=0.09595685 / 0.06072469
=1.5802

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
=676.383 / 595.352
=1.1361

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))
=(17.548 / (17.548 + 75.799)) / (28.808 / (28.808 + 106.056))
=0.18798676 / 0.21360778
=0.8801

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)
=(80.212 / 676.383) / (77.952 / 595.352)
=0.11858962 / 0.1309343
=0.9057

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 + 65.662) / 283.69) / ((0 + 82.396) / 236.543)
=0.23145687 / 0.34833413
=0.6645

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
=(101.851 - 0.591 - 85.406) / 283.69
=0.0559

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 & Company has a M-score of -1.90 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 & Company 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 & Company Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.15581.01670.96040.68110.82880.82550.91961.11930.89590.7936
GMI 0.91280.91510.9460.93410.95570.95780.9550.96841.00741.0693
AQI 0.65960.72770.72011.87081.77121.18881.58791.00461.36141.5802
SGI 1.39391.46131.47911.49571.4641.46761.46211.39941.31171.1361
DEPI 0.9531.0531.10011.01381.0320.97050.94961.09740.95640.8801
SGAI 0.9510.94090.9130.91030.91620.87460.86670.88880.85050.9057
LVGI 1.04530.99561.04211.41971.62071.66491.46320.93310.78250.6645
TATA -0.0549-0.0398-0.0661-0.1012-0.0855-0.1159-0.0231-0.03220.02170.0559
M-score -2.44-2.38-2.53-2.61-2.52-2.91-2.17-2.13-1.95-1.90
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