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Roper Industries Inc (NYSE:ROP)
Beneish M-Score
-2.66 (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 -2.66 suggests that the company is not a manipulator.

ROP' s 10-Year Beneish M-Score Range
Min: -2.88   Max: -2.04
Current: -2.66

-2.88
-2.04

During the past 13 years, the highest Beneish M-Score of Roper Industries Inc was -2.04. The lowest was -2.88. 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 * 0.9359+0.528 * 0.9604+0.404 * 1.0119+0.892 * 1.0817+0.115 * 0.9455
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0523+4.679 * -0.0323-0.327 * 1.0333
=-2.66

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $606 Mil.
Revenue was 889.173 + 827.81 + 784.01 + 737.135 = $3,238 Mil.
Gross Profit was 533.22 + 482.625 + 445.507 + 421.576 = $1,883 Mil.
Total Current Assets was $1,373 Mil.
Total Assets was $8,185 Mil.
Property, Plant and Equipment(Net PPE) was $117 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $1,041 Mil.
Total Current Liabilities was $643 Mil.
Long-Term Debt was $2,454 Mil.
Net Income was 165.703 + 136.323 + 111.353 + 124.914 = $538 Mil.
Non Operating Income was -0.645 + 0.409 + 2.536 + -2.492 = $-0 Mil.
Cash Flow from Operations was 235.78 + 255.766 + 139.739 + 171.268 = $803 Mil.
Accounts Receivable was $599 Mil.
Revenue was 809.91 + 747.641 + 724.872 + 711.066 = $2,993 Mil.
Gross Profit was 466.361 + 416.555 + 397.608 + 391.193 = $1,672 Mil.
Total Current Assets was $1,246 Mil.
Total Assets was $7,071 Mil.
Property, Plant and Equipment(Net PPE) was $110 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $914 Mil.
Total Current Liabilities was $1,086 Mil.
Long-Term Debt was $1,503 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)
=(606.02 / 3238.128) / (598.601 / 2993.489)
=0.18715134 / 0.19996766
=0.9359

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)
=(482.625 / 2993.489) / (533.22 / 3238.128)
=0.55845102 / 0.58148659
=0.9604

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 - (1373.337 + 117.31) / 8184.981) / (1 - (1245.542 + 110.397) / 7071.104)
=0.81788021 / 0.80824225
=1.0119

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
=3238.128 / 2993.489
=1.0817

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))
=(154.748 / (154.748 + 110.397)) / (189.19 / (189.19 + 117.31))
=0.58363537 / 0.61725938
=0.9455

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)
=(1040.567 / 3238.128) / (914.13 / 2993.489)
=0.32134832 / 0.30537276
=1.0523

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)
=((2453.836 + 643.091) / 8184.981) / ((1503.107 + 1086.21) / 7071.104)
=0.37836704 / 0.36618285
=1.0333

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
=(538.293 - -0.192 - 802.553) / 8184.981
=-0.0323

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 -2.66 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.8980.89580.85230.91231.05941.11211.12071.1550.97580.9359
GMI 0.97660.98630.99110.98920.98180.97020.96460.96080.95890.9604
AQI 0.99260.98360.97210.9371.03551.04991.06111.11461.00691.0119
SGI 1.21111.17221.14651.09811.06771.07021.05471.06611.08081.0817
DEPI 0.92130.96470.98390.9820.99170.96470.94620.94590.93590.9455
SGAI 0.95820.95870.9580.96960.99130.9991.01561.04861.04471.0523
LVGI 0.82880.83680.86420.85021.22021.24121.24671.48191.03551.0333
TATA -0.0303-0.0343-0.0399-0.0298-0.0274-0.027-0.0287-0.0279-0.0319-0.0323
M-score -2.49-2.54-2.64-2.59-2.56-2.52-2.54-2.56-2.63-2.66
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