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Ross Stores Inc (NAS:ROST)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

ROST' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -2.07
Current: -2.81

-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 * 0.9588+0.528 * 0.987+0.404 * 0.8856+0.892 * 1.0895+0.115 * 1.0497
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9777+4.679 * -0.0647-0.327 * 1.082
=-2.81

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $88 Mil.
Revenue was 2938.148 + 3032.698 + 2598.82 + 2729.566 = $11,299 Mil.
Gross Profit was 870.693 + 829.129 + 716.635 + 785.549 = $3,202 Mil.
Total Current Assets was $2,486 Mil.
Total Assets was $4,936 Mil.
Property, Plant and Equipment(Net PPE) was $2,277 Mil.
Depreciation, Depletion and Amortization(DDA) was $240 Mil.
Selling, General & Admin. Expense(SGA) was $1,645 Mil.
Total Current Liabilities was $1,825 Mil.
Long-Term Debt was $396 Mil.
Net Income was 282.205 + 248.53 + 192.72 + 239.561 = $963 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 413.988 + 390.883 + 240.191 + 237.214 = $1,282 Mil.
Accounts Receivable was $84 Mil.
Revenue was 2680.593 + 2741.04 + 2398.122 + 2551.277 = $10,371 Mil.
Gross Profit was 772.409 + 748.939 + 651.887 + 727.5 = $2,901 Mil.
Total Current Assets was $2,063 Mil.
Total Assets was $4,151 Mil.
Property, Plant and Equipment(Net PPE) was $1,924 Mil.
Depreciation, Depletion and Amortization(DDA) was $214 Mil.
Selling, General & Admin. Expense(SGA) was $1,544 Mil.
Total Current Liabilities was $1,576 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)
=(88.258 / 11299.232) / (84.492 / 10371.032)
=0.00781097 / 0.00814692
=0.9588

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)
=(829.129 / 10371.032) / (870.693 / 11299.232)
=0.27969589 / 0.28338262
=0.987

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 - (2486.366 + 2276.747) / 4936.049) / (1 - (2063.022 + 1924.038) / 4151.288)
=0.03503531 / 0.03956073
=0.8856

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
=11299.232 / 10371.032
=1.0895

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))
=(213.85 / (213.85 + 1924.038)) / (239.81 / (239.81 + 2276.747))
=0.10002863 / 0.09529289
=1.0497

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)
=(1644.867 / 11299.232) / (1544.2 / 10371.032)
=0.14557335 / 0.1488955
=0.9777

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)
=((395.677 + 1825.007) / 4936.049) / ((149.694 + 1576.353) / 4151.288)
=0.449891 / 0.4157859
=1.082

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
=(963.016 - 0 - 1282.276) / 4936.049
=-0.0647

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 -2.81 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 -0.092-0.1161-0.039-0.118-0.161-0.038-0.0494-0.0525-0.0474-0.0953
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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 1.03821.04121.08910.97070.9981.0441.03160.99381.08440.9588
GMI 0.98670.9850.98550.98450.99381.0011.00441.00160.99780.987
AQI 0.97080.96551.01290.99350.99680.93260.94420.89610.89430.8856
SGI 1.12931.1141.10641.09531.05241.04711.0431.04881.07931.0895
DEPI 1.03241.041.08841.11441.11581.11211.07581.10771.06551.0497
SGAI 0.97640.98480.98820.99541.00871.00861.00190.99840.98050.9777
LVGI 0.94540.95690.94390.94150.92430.9880.97261.11141.10491.082
TATA -0.0525-0.0579-0.0419-0.0402-0.0474-0.0788-0.086-0.0918-0.0953-0.0647
M-score -2.57-2.61-2.47-2.59-2.62-2.78-2.82-2.94-2.84-2.81
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