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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 -2.07. 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 * 0.9457||+||0.528 * 0.98||+||0.404 * 1.029||+||0.892 * 1.0093||+||0.115 * 0.9709|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0216||+||4.679 * -0.0248||-||0.327 * 1.1645|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $488 Mil.|
Revenue was 943.64 + 883.933 + 889.541 + 865.281 = $3,582 Mil.
Gross Profit was 579.091 + 533.483 + 533.911 + 518.161 = $2,165 Mil.
Total Current Assets was $1,618 Mil.
Total Assets was $10,168 Mil.
Property, Plant and Equipment(Net PPE) was $106 Mil.
Depreciation, Depletion and Amortization(DDA) was $204 Mil.
Selling, General & Admin. Expense(SGA) was $1,137 Mil.
Total Current Liabilities was $720 Mil.
Long-Term Debt was $3,264 Mil.
Net Income was 208.597 + 160.417 + 171.28 + 155.773 = $696 Mil.
Non Operating Income was 60.6 + 0.251 + -1.52 + -40.351 = $19 Mil.
Cash Flow from Operations was 269.258 + 226.619 + 172.549 + 260.399 = $929 Mil.
|Accounts Receivable was $512 Mil.
Revenue was 946.145 + 884.122 + 885.175 + 834.052 = $3,549 Mil.
Gross Profit was 565.741 + 524.04 + 523.182 + 488.936 = $2,102 Mil.
Total Current Assets was $1,512 Mil.
Total Assets was $8,413 Mil.
Property, Plant and Equipment(Net PPE) was $111 Mil.
Depreciation, Depletion and Amortization(DDA) was $197 Mil.
Selling, General & Admin. Expense(SGA) was $1,102 Mil.
Total Current Liabilities was $628 Mil.
Long-Term Debt was $2,203 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)|
|=||(488.271 / 3582.395)||/||(511.538 / 3549.494)|
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)|
|=||(533.483 / 3549.494)||/||(579.091 / 3582.395)|
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 - (1618.047 + 105.51) / 10168.365)||/||(1 - (1512.105 + 110.876) / 8412.934)|
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))|
|=||(197.284 / (197.284 + 110.876))||/||(204.261 / (204.261 + 105.51))|
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)|
|=||(1136.728 / 3582.395)||/||(1102.426 / 3549.494)|
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)|
|=||((3264.417 + 720.128) / 10168.365)||/||((2203.031 + 627.947) / 8412.934)|
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|
|=||(696.067 - 18.98||-||928.825)||/||10168.365|
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 -2.70 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