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Ross Stores Inc (NAS:ROST)
Beneish M-Score
-2.57 (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 -2.58 suggests that the company is not a manipulator.

ROST' s Beneish M-Score Range Over the Past 10 Years
Min: -3.33   Max: -2.07
Current: -2.57

-3.33
-2.07

During the past 13 years, the highest Beneish M-Score of Ross Stores Inc was -2.07. The lowest was -3.33. 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 * 0.9827+0.528 * 0.9906+0.404 * 0.9444+0.892 * 1.0904+0.115 * 0.9081
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9933+4.679 * -0.0302-0.327 * 0.944
=-2.58

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $81 Mil.
Revenue was 2782.855 + 2968.27 + 2938.148 + 3032.698 = $11,722 Mil.
Gross Profit was 779.508 + 848.79 + 870.693 + 829.129 = $3,328 Mil.
Total Current Assets was $2,435 Mil.
Total Assets was $4,904 Mil.
Property, Plant and Equipment(Net PPE) was $2,308 Mil.
Depreciation, Depletion and Amortization(DDA) was $265 Mil.
Selling, General & Admin. Expense(SGA) was $1,718 Mil.
Total Current Liabilities was $1,749 Mil.
Long-Term Debt was $396 Mil.
Net Income was 215.656 + 258.639 + 282.205 + 248.53 = $1,005 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 171.656 + 176.383 + 413.988 + 390.883 = $1,153 Mil.
Accounts Receivable was $76 Mil.
Revenue was 2598.82 + 2729.566 + 2680.593 + 2741.04 = $10,750 Mil.
Gross Profit was 716.635 + 785.549 + 772.409 + 748.939 = $3,024 Mil.
Total Current Assets was $2,302 Mil.
Total Assets was $4,667 Mil.
Property, Plant and Equipment(Net PPE) was $2,202 Mil.
Depreciation, Depletion and Amortization(DDA) was $227 Mil.
Selling, General & Admin. Expense(SGA) was $1,586 Mil.
Total Current Liabilities was $1,767 Mil.
Long-Term Debt was $396 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)
=(81.324 / 11721.971) / (75.895 / 10750.019)
=0.00693774 / 0.00705999
=0.9827

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)
=(848.79 / 10750.019) / (779.508 / 11721.971)
=0.28125829 / 0.28392154
=0.9906

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 - (2434.59 + 2307.665) / 4903.771) / (1 - (2302.493 + 2201.62) / 4666.874)
=0.0329371 / 0.03487581
=0.9444

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
=11721.971 / 10750.019
=1.0904

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))
=(227.021 / (227.021 + 2201.62)) / (264.812 / (264.812 + 2307.665))
=0.09347656 / 0.10294047
=0.9081

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)
=(1718.22 / 11721.971) / (1586.374 / 10750.019)
=0.14658115 / 0.14756941
=0.9933

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)
=((395.909 + 1749.479) / 4903.771) / ((395.971 + 1766.924) / 4666.874)
=0.43749759 / 0.46345691
=0.944

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
=(1005.03 - 0 - 1152.91) / 4903.771
=-0.0302

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 -2.58 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 0.80160.91761.16021.01220.970.93711.02381.03820.9981.0844
GMI 1.006910.99030.9630.91240.95170.98750.98670.99380.9978
AQI 1.10161.11971.09480.86420.75680.98821.430.97080.99680.8943
SGI 1.16611.12661.07271.08551.10761.09491.09441.12931.05241.0793
DEPI 0.98441.16941.01910.95540.89861.02781.23081.03241.11581.0655
SGAI 1.01510.97411.01091.01810.9870.99320.9690.97641.00870.9805
LVGI 1.03661.15330.9360.95871.03190.99570.940.94540.92431.1049
TATA -0.092-0.1161-0.0407-0.118-0.161-0.038-0.0494-0.0525-0.0474-0.0953
M-score -2.92-2.96-2.40-3.01-3.33-2.66-2.39-2.57-2.62-2.84

Ross Stores Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.08910.97070.9981.0441.03160.99381.08440.95880.94890.9827
GMI 0.98550.98450.99381.0011.00441.00160.99780.9870.99110.9906
AQI 1.01290.99350.99680.93260.94260.88370.89430.88560.8660.9444
SGI 1.10641.09531.05241.04711.0431.04881.07931.08951.09371.0904
DEPI 1.08841.11441.11581.11211.07581.10771.06551.04971.00380.9081
SGAI 0.98820.99541.00871.00861.00190.99840.98050.97770.98860.9933
LVGI 0.94390.94150.92430.9880.97251.11081.10491.0821.0640.944
TATA -0.0419-0.0402-0.0474-0.0788-0.086-0.0918-0.0953-0.0647-0.0496-0.0302
M-score -2.47-2.59-2.62-2.78-2.82-2.94-2.84-2.81-2.75-2.58
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