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Roper Industries Inc (NYSE:ROP)
Beneish M-Score
-2.63 (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.

Roper Industries Inc has a M-score of -2.63 suggests that the company is not a manipulator.

ROP' s 10-Year Beneish M-Score Range
Min: -3.88   Max: -2.03
Current: -2.63

-3.88
-2.03

During the past 13 years, the highest Beneish M-Score of Roper Industries Inc was -2.03. The lowest was -3.88. And the median was -2.52.


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 Roper Industries 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 * 0.8482+0.528 * 0.9631+0.404 * 0.9723+0.892 * 1.1161+0.115 * 0.957
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9913+4.679 * -0.0288-0.327 * 0.8458
=-2.63

* 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 $518 Mil.
Revenue was 885.175 + 834.052 + 889.173 + 827.81 = $3,436 Mil.
Gross Profit was 523.182 + 488.936 + 533.22 + 482.625 = $2,028 Mil.
Total Current Assets was $1,525 Mil.
Total Assets was $8,262 Mil.
Property, Plant and Equipment(Net PPE) was $116 Mil.
Depreciation, Depletion and Amortization(DDA) was $196 Mil.
Selling, General & Admin. Expense(SGA) was $1,080 Mil.
Total Current Liabilities was $635 Mil.
Long-Term Debt was $2,234 Mil.
Net Income was 157.361 + 147.226 + 165.703 + 136.323 = $607 Mil.
Non Operating Income was -0.93 + 1.42 + -0.645 + 0.409 = $0 Mil.
Cash Flow from Operations was 140.502 + 212.628 + 235.78 + 255.766 = $845 Mil.
Accounts Receivable was $548 Mil.
Revenue was 784.01 + 737.135 + 809.91 + 747.641 = $3,079 Mil.
Gross Profit was 445.507 + 421.576 + 466.361 + 416.555 = $1,750 Mil.
Total Current Assets was $1,328 Mil.
Total Assets was $8,214 Mil.
Property, Plant and Equipment(Net PPE) was $116 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $977 Mil.
Total Current Liabilities was $1,127 Mil.
Long-Term Debt was $2,245 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)
=(518.378 / 3436.21) / (547.572 / 3078.696)
=0.15085749 / 0.17785842
=0.8482

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)
=(488.936 / 3078.696) / (523.182 / 3436.21)
=0.56842215 / 0.59017435
=0.9631

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 - (1524.525 + 116.394) / 8262.146) / (1 - (1328.135 + 115.677) / 8213.742)
=0.80139312 / 0.82421995
=0.9723

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
=3436.21 / 3078.696
=1.1161

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))
=(174.045 / (174.045 + 115.677)) / (196.238 / (196.238 + 116.394))
=0.60073105 / 0.62769646
=0.957

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)
=(1080.459 / 3436.21) / (976.577 / 3078.696)
=0.31443334 / 0.31720475
=0.9913

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)
=((2233.809 + 635.272) / 8262.146) / ((2245.424 + 1126.851) / 8213.742)
=0.34725615 / 0.410565
=0.8458

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
=(606.613 - 0.254 - 844.676) / 8262.146
=-0.0288

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 Industries Inc has a M-score of -2.63 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.

Roper Industries Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.08750.7091.17560.96060.81771.13960.90780.92881.12010.9116
GMI 1.05281.0010.98671.00490.97821.01240.95230.98630.97020.9604
AQI 1.03871.05560.98810.91871.08961.02371.01190.98361.04991.0119
SGI 1.47521.49911.16991.2361.09720.88871.16411.17221.07021.0817
DEPI 0.58140.70290.97370.93470.98210.97310.89450.96470.96470.9455
SGAI 0.89340.98130.96990.9581.03211.03811.0090.95870.9991.0523
LVGI 0.89670.95310.98260.92051.030.84351.00450.83681.24121.0333
TATA -0.0263-0.0504-0.0231-0.0264-0.0409-0.0303-0.035-0.0343-0.027-0.0323
M-score -2.05-2.53-2.28-2.43-2.75-2.53-2.62-2.51-2.51-2.68

Roper Industries Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.87040.90871.0871.12011.11211.16950.95360.91160.9620.8482
GMI 0.99110.98920.98180.97020.96460.96080.95890.96040.96390.9631
AQI 0.97210.9371.03551.04991.06111.11461.00691.01191.01090.9723
SGI 1.14651.09811.06771.07021.05471.06611.08081.08171.10451.1161
DEPI 0.98390.9820.99170.96470.94620.94590.93590.94550.95220.957
SGAI 0.9580.96960.99130.9991.01561.04861.04471.05231.04180.9913
LVGI 0.86420.85021.22021.24121.24671.48191.03551.03331.02960.8458
TATA -0.0399-0.0298-0.0274-0.027-0.0287-0.0279-0.0319-0.0323-0.035-0.0288
M-score -2.62-2.59-2.53-2.51-2.55-2.54-2.65-2.68-2.62-2.63
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