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Ross Stores Inc (NAS:ROST)
Beneish M-Score
-2.82 (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.

Ross Stores Inc has a M-score of -2.82 suggests that the company is not a manipulator.

ROST' s 10-Year Beneish M-Score Range
Min: -3.75   Max: -2.07
Current: -2.82

-3.75
-2.07

During the past 13 years, the highest Beneish M-Score of Ross Stores Inc was -2.07. The lowest was -3.75. And the median was -2.62.


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 Ross Stores 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 * 1.0316+0.528 * 1.0044+0.404 * 0.9442+0.892 * 1.043+0.115 * 1.0758
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0019+4.679 * -0.086-0.327 * 0.9726
=-2.82

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $85 Mil.
Revenue was 2729.566 + 2680.593 + 2741.04 + 2398.122 = $10,549 Mil.
Gross Profit was 785.549 + 772.409 + 748.939 + 651.887 = $2,959 Mil.
Total Current Assets was $2,024 Mil.
Total Assets was $4,168 Mil.
Property, Plant and Equipment(Net PPE) was $1,979 Mil.
Depreciation, Depletion and Amortization(DDA) was $218 Mil.
Selling, General & Admin. Expense(SGA) was $1,558 Mil.
Total Current Liabilities was $1,532 Mil.
Long-Term Debt was $150 Mil.
Net Income was 239.561 + 243.913 + 217.953 + 171.618 = $873 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 237.214 + 504.577 + 340.782 + 148.893 = $1,231 Mil.
Accounts Receivable was $79 Mil.
Revenue was 2551.277 + 2539.914 + 2760.646 + 2262.723 = $10,115 Mil.
Gross Profit was 727.5 + 741.103 + 766.985 + 613.726 = $2,849 Mil.
Total Current Assets was $2,098 Mil.
Total Assets was $3,908 Mil.
Property, Plant and Equipment(Net PPE) was $1,646 Mil.
Depreciation, Depletion and Amortization(DDA) was $197 Mil.
Selling, General & Admin. Expense(SGA) was $1,491 Mil.
Total Current Liabilities was $1,472 Mil.
Long-Term Debt was $150 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)
=(85.218 / 10549.321) / (79.202 / 10114.56)
=0.00807806 / 0.00783049
=1.0316

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)
=(772.409 / 10114.56) / (785.549 / 10549.321)
=0.2817042 / 0.28047151
=1.0044

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 - (2023.865 + 1979.288) / 4167.832) / (1 - (2098.477 + 1646.457) / 3908.485)
=0.03951191 / 0.04184511
=0.9442

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
=10549.321 / 10114.56
=1.043

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))
=(196.66 / (196.66 + 1646.457)) / (217.928 / (217.928 + 1979.288))
=0.10669968 / 0.09918369
=1.0758

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)
=(1558.232 / 10549.321) / (1491.147 / 10114.56)
=0.14770922 / 0.14742579
=1.0019

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)
=((150 + 1532.121) / 4167.832) / ((150 + 1471.814) / 3908.485)
=0.40359616 / 0.41494697
=0.9726

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
=(873.045 - 0 - 1231.466) / 4167.832
=-0.086

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.

Ross Stores Inc has a M-score of -2.82 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.

Ross Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 1.1390.80160.91761.16021.01220.970.93711.02381.03820.998
GMI 1.12841.006910.99030.9630.91240.95170.98750.98670.9938
AQI 1.05711.10161.11971.09480.86420.75680.98821.430.97080.9968
SGI 1.08151.16611.12661.07271.08551.10761.09491.09441.12931.0524
DEPI 0.94030.98441.16941.01910.95540.89861.02781.23081.03241.1158
SGAI 0.97771.01510.97411.01091.01810.9870.99320.9690.97641.0087
LVGI 0.96981.03661.15330.9360.95871.03190.99570.940.94540.9243
TATA -0.0646-0.092-0.1161-0.039-0.118-0.161-0.038-0.0494-0.0525-0.0474
M-score -2.48-2.92-2.96-2.40-3.01-3.33-2.66-2.39-2.57-2.62

Ross Stores Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.97271.01550.98031.03821.04121.08910.97070.9981.0441.0316
GMI 0.99690.99040.99140.98670.9850.98550.98450.99381.0011.0044
AQI 1.37550.88430.93210.97080.96551.01290.99350.99680.93430.9442
SGI 1.11051.11711.121.12931.1141.10641.09531.05241.04711.043
DEPI 1.19141.13281.09821.03241.041.08841.11441.11581.11211.0758
SGAI 0.96440.96750.96790.97640.98480.98820.99541.00871.00861.0019
LVGI 0.98241.02160.99370.94540.95690.94390.94150.92430.98810.9726
TATA -0.1109-0.1225-0.0851-0.0525-0.0579-0.0419-0.0402-0.0474-0.0788-0.086
M-score -2.74-2.97-2.80-2.57-2.61-2.47-2.59-2.62-2.78-2.82
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