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Roper Industries Inc (NYSE:ROP)
Beneish M-Score
-2.62 (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 -2.62 suggests that the company is not a manipulator.

ROP' s 10-Year Beneish M-Score Range
Min: -3.88   Max: -2.04
Current: -2.62

-3.88
-2.04

During the past 13 years, the highest Beneish M-Score of Roper Industries Inc was -2.04. 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 * 0.9699+0.528 * 0.9639+0.404 * 1.0109+0.892 * 1.1045+0.115 * 0.9522
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0418+4.679 * -0.035-0.327 * 1.0296
=-2.62

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $609 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.
Net Income was 147.226 + 165.703 + 136.323 + 111.353 = $561 Mil.
Non Operating Income was 1.42 + -0.645 + 0.409 + 2.536 = $4 Mil.
Cash Flow from Operations was 212.628 + 235.78 + 255.766 + 139.739 = $844 Mil.
Accounts Receivable was $569 Mil.
Revenue was 737.135 + 809.91 + 747.641 + 724.872 = $3,020 Mil.
Gross Profit was 421.576 + 466.361 + 416.555 + 397.608 = $1,702 Mil.
Total Current Assets was $1,285 Mil.
Total Assets was $7,053 Mil.
Property, Plant and Equipment(Net PPE) was $111 Mil.
Depreciation, Depletion and Amortization(DDA) was $163 Mil.
Selling, General & Admin. Expense(SGA) was $930 Mil.
Total Current Liabilities was $1,083 Mil.
Long-Term Debt was $1,403 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)
=(609.355 / 3335.045) / (568.809 / 3019.558)
=0.18271268 / 0.18837492
=0.9699

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)
=(533.22 / 3019.558) / (488.936 / 3335.045)
=0.56369177 / 0.58478611
=0.9639

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 - (1432.17 + 116.59) / 8189.703) / (1 - (1285.056 + 110.637) / 7052.99)
=0.81088936 / 0.80211329
=1.0109

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
=3335.045 / 3019.558
=1.1045

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))
=(162.722 / (162.722 + 110.637)) / (194.452 / (194.452 + 116.59))
=0.59526849 / 0.62516316
=0.9522

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)
=(1069.704 / 3335.045) / (929.64 / 3019.558)
=0.3207465 / 0.30787287
=1.0418

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)
=((2304.143 + 667.973) / 8189.703) / ((1403.259 + 1082.773) / 7052.99)
=0.36290889 / 0.35247916
=1.0296

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
=(560.605 - 3.72 - 843.913) / 8189.703
=-0.035

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 -2.62 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 1.08750.7091.17560.96060.95051.12730.93760.89581.11210.9359
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 -2.05-2.53-2.28-2.43-2.62-2.55-2.59-2.54-2.52-2.66

Roper Industries Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.89580.85230.91231.05941.11211.12071.1550.97580.93590.9699
GMI 0.98630.99110.98920.98180.97020.96460.96080.95890.96040.9639
AQI 0.98360.97210.9371.03551.04991.06111.11461.00691.01191.0109
SGI 1.17221.14651.09811.06771.07021.05471.06611.08081.08171.1045
DEPI 0.96470.98390.9820.99170.96470.94620.94590.93590.94550.9522
SGAI 0.95870.9580.96960.99130.9991.01561.04861.04471.05231.0418
LVGI 0.83680.86420.85021.22021.24121.24671.48191.03551.03331.0296
TATA -0.0343-0.0399-0.0298-0.0274-0.027-0.0287-0.0279-0.0319-0.0323-0.035
M-score -2.54-2.64-2.59-2.56-2.52-2.54-2.56-2.63-2.66-2.62
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