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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 Roper Technologies Inc was -2.03. The lowest was -3.88. And the median was -2.53.
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 Roper Technologies 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 * 0.9041||+||0.528 * 0.9826||+||0.404 * 1.0088||+||0.892 * 1.0737||+||0.115 * 0.9775|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9649||+||4.679 * -0.0259||-||0.327 * 1.0185|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $499 Mil.|
Revenue was 865.281 + 946.145 + 884.122 + 885.175 = $3,581 Mil.
Gross Profit was 518.161 + 565.741 + 524.04 + 523.182 = $2,131 Mil.
Total Current Assets was $1,522 Mil.
Total Assets was $8,975 Mil.
Property, Plant and Equipment(Net PPE) was $111 Mil.
Depreciation, Depletion and Amortization(DDA) was $197 Mil.
Selling, General & Admin. Expense(SGA) was $1,108 Mil.
Total Current Liabilities was $699 Mil.
Long-Term Debt was $2,618 Mil.
Net Income was 155.773 + 185.936 + 155.51 + 157.361 = $655 Mil.
Non Operating Income was -0.679 + -0.422 + 0.552 + -0.93 = $-1 Mil.
Cash Flow from Operations was 260.399 + 261.209 + 226.102 + 140.502 = $888 Mil.
|Accounts Receivable was $514 Mil.
Revenue was 834.052 + 889.173 + 827.81 + 784.01 = $3,335 Mil.
Gross Profit was 488.936 + 533.22 + 482.625 + 445.507 = $1,950 Mil.
Total Current Assets was $1,432 Mil.
Total Assets was $8,190 Mil.
Property, Plant and Equipment(Net PPE) was $117 Mil.
Depreciation, Depletion and Amortization(DDA) was $194 Mil.
Selling, General & Admin. Expense(SGA) was $1,070 Mil.
Total Current Liabilities was $668 Mil.
Long-Term Debt was $2,304 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)|
|=||(499.042 / 3580.723)||/||(514.081 / 3335.045)|
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)|
|=||(565.741 / 3335.045)||/||(518.161 / 3580.723)|
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 - (1521.822 + 110.973) / 8974.622)||/||(1 - (1432.17 + 116.59) / 8189.703)|
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))|
|=||(194.452 / (194.452 + 116.59))||/||(196.889 / (196.889 + 110.973))|
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)|
|=||(1108.155 / 3580.723)||/||(1069.704 / 3335.045)|
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)|
|=||((2617.722 + 699.384) / 8974.622)||/||((2304.143 + 667.973) / 8189.703)|
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|
|=||(654.58 - -1.479||-||888.212)||/||8974.622|
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.
Roper Technologies Inc has a M-score of -2.63 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
Roper Technologies Inc Annual Data
Roper Technologies Inc Quarterly Data