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Roper Industries Inc (NYSE:ROP)
Beneish M-Score
-2.53 (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 -2.53 suggests that the company is not a manipulator.

ROP' s 10-Year Beneish M-Score Range
Min: -3.88   Max: -2.03
Current: -2.53

-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 -2.53.


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 * 0.9464+0.528 * 0.9703+0.404 * 0.9867+0.892 * 1.1056+0.115 * 0.9646
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9844+4.679 * -0.0223-0.327 * 0.9067
=-2.53

* 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 $529 Mil.
Revenue was 884.122 + 885.175 + 834.052 + 889.173 = $3,493 Mil.
Gross Profit was 524.04 + 523.182 + 488.936 + 533.22 = $2,069 Mil.
Total Current Assets was $1,533 Mil.
Total Assets was $8,510 Mil.
Property, Plant and Equipment(Net PPE) was $115 Mil.
Depreciation, Depletion and Amortization(DDA) was $197 Mil.
Selling, General & Admin. Expense(SGA) was $1,096 Mil.
Total Current Liabilities was $662 Mil.
Long-Term Debt was $2,358 Mil.
Net Income was 155.51 + 157.361 + 147.226 + 165.703 = $626 Mil.
Non Operating Income was 0.552 + -0.93 + 1.42 + -0.645 = $0 Mil.
Cash Flow from Operations was 226.102 + 140.502 + 212.628 + 235.78 = $815 Mil.
Accounts Receivable was $505 Mil.
Revenue was 827.81 + 784.01 + 737.135 + 809.91 = $3,159 Mil.
Gross Profit was 482.625 + 445.507 + 421.576 + 466.361 = $1,816 Mil.
Total Current Assets was $1,389 Mil.
Total Assets was $8,246 Mil.
Property, Plant and Equipment(Net PPE) was $118 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General & Admin. Expense(SGA) was $1,007 Mil.
Total Current Liabilities was $634 Mil.
Long-Term Debt was $2,594 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)
=(528.734 / 3492.522) / (505.284 / 3158.865)
=0.15139031 / 0.15995745
=0.9464

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)
=(523.182 / 3158.865) / (524.04 / 3492.522)
=0.57491187 / 0.59251681
=0.9703

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 - (1532.691 + 115.243) / 8510.266) / (1 - (1389.199 + 117.785) / 8245.575)
=0.80635928 / 0.81723725
=0.9867

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
=3492.522 / 3158.865
=1.1056

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))
=(183.427 / (183.427 + 117.785)) / (197.332 / (197.332 + 115.243))
=0.60896312 / 0.63131089
=0.9646

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)
=(1095.565 / 3492.522) / (1006.555 / 3158.865)
=0.31368879 / 0.31864451
=0.9844

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)
=((2358.474 + 662.005) / 8510.266) / ((2593.607 + 634.137) / 8245.575)
=0.35492181 / 0.39145166
=0.9067

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
=(625.8 - 0.397 - 815.012) / 8510.266
=-0.0223

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 -2.53 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.90871.0871.12011.11211.16950.95360.91160.9620.84820.9464
GMI 0.98920.98180.97020.96460.96080.95890.96040.96390.96310.9703
AQI 0.9371.03551.04991.06111.11461.00691.01191.01090.97230.9867
SGI 1.09811.06771.07021.05471.06611.08081.08171.10451.11611.1056
DEPI 0.9820.99170.96470.94620.94590.93590.94550.95220.9570.9646
SGAI 0.96960.99130.9991.01561.04861.04471.05231.04180.99130.9844
LVGI 0.85021.22021.24121.24671.48191.03551.03331.02960.84580.9067
TATA -0.0298-0.0274-0.027-0.0287-0.0279-0.0319-0.0323-0.035-0.0288-0.0223
M-score -2.59-2.53-2.51-2.55-2.54-2.65-2.68-2.62-2.63-2.53
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