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Roper Industries Inc (NYSE:ROP)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

ROP' s 10-Year Beneish M-Score Range
Min: -3.88   Max: -2.04
Current: -2.6

-3.88
-2.04

During the past 11 years, the highest Beneish M-Score of Roper Industries Inc was -2.04. The lowest was -3.88. And the median was -2.54.


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 * 0.8864+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
=-2.60

* 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 $625 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 $632 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)
=(625.166 / 3436.21) / (631.891 / 3078.696)
=0.18193475 / 0.20524631
=0.8864

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 -2.60 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 0.96060.95051.12730.93760.89581.11210.9359
GMI 1.00490.97821.01240.95230.98630.97020.9604
AQI 0.91871.08961.02371.01190.98361.04991.0119
SGI 1.2361.09720.88871.16411.17221.07021.0817
DEPI 0.93470.98210.97310.89450.96470.96470.9455
SGAI 0.9581.03211.03811.0090.95870.9991.0523
LVGI 0.92051.030.84351.00450.83681.24121.0333
TATA -0.0264-0.0409-0.0303-0.035-0.0343-0.027-0.0323
M-score -2.43-2.62-2.55-2.59-2.54-2.52-2.66

Roper Industries Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.85230.91231.05941.11211.12071.1550.97580.93590.96990.8864
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 -2.64-2.59-2.56-2.52-2.54-2.56-2.63-2.66-2.62-2.60
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