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Ross Stores Inc (NAS:ROST)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

ROST' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -2.22
Current: -2.84

-3.33
-2.22

During the past 13 years, the highest Beneish M-Score of Ross Stores Inc was -2.22. 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 * 1.0844+0.528 * 0.9978+0.404 * 0.8943+0.892 * 1.0793+0.115 * 1.0655
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9805+4.679 * -0.0953-0.327 * 1.1049
=-2.84

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $73 Mil.
Revenue was 3032.698 + 2598.82 + 2729.566 + 2680.593 = $11,042 Mil.
Gross Profit was 829.129 + 716.635 + 785.549 + 772.409 = $3,104 Mil.
Total Current Assets was $2,263 Mil.
Total Assets was $4,703 Mil.
Property, Plant and Equipment(Net PPE) was $2,274 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $1,615 Mil.
Total Current Liabilities was $1,659 Mil.
Long-Term Debt was $398 Mil.
Net Income was 248.53 + 192.72 + 239.561 + 243.913 = $925 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 390.883 + 240.191 + 237.214 + 504.577 = $1,373 Mil.
Accounts Receivable was $63 Mil.
Revenue was 2741.04 + 2398.122 + 2551.277 + 2539.914 = $10,230 Mil.
Gross Profit was 748.939 + 651.887 + 727.5 + 741.103 = $2,869 Mil.
Total Current Assets was $1,867 Mil.
Total Assets was $3,897 Mil.
Property, Plant and Equipment(Net PPE) was $1,875 Mil.
Depreciation, Depletion and Amortization(DDA) was $206 Mil.
Selling, General & Admin. Expense(SGA) was $1,526 Mil.
Total Current Liabilities was $1,393 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)
=(73.278 / 11041.677) / (62.612 / 10230.353)
=0.00663649 / 0.00612022
=1.0844

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)
=(716.635 / 10230.353) / (829.129 / 11041.677)
=0.28048191 / 0.28109154
=0.9978

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 - (2262.79 + 2273.752) / 4703.134) / (1 - (1867.159 + 1875.299) / 3896.797)
=0.03542149 / 0.03960663
=0.8943

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
=11041.677 / 10230.353
=1.0793

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))
=(206.111 / (206.111 + 1875.299)) / (232.959 / (232.959 + 2273.752))
=0.0990247 / 0.09293413
=1.0655

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)
=(1615.371 / 11041.677) / (1526.366 / 10230.353)
=0.14629761 / 0.14919974
=0.9805

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)
=((398.375 + 1659.368) / 4703.134) / ((150 + 1393.057) / 3896.797)
=0.43752591 / 0.39598085
=1.1049

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
=(924.724 - 0 - 1372.865) / 4703.134
=-0.0953

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 -2.84 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

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.98031.03821.04121.08910.97070.9981.0441.03160.99381.0844
GMI 0.99140.98670.9850.98550.98450.99381.0011.00441.00160.9978
AQI 0.93210.97080.96551.01290.99350.99680.93430.94420.89610.8943
SGI 1.121.12931.1141.10641.09531.05241.04711.0431.04881.0793
DEPI 1.09821.03241.041.08841.11441.11581.11211.07581.10771.0655
SGAI 0.96790.97640.98480.98820.99541.00871.00861.00190.99840.9805
LVGI 0.99370.94540.95690.94390.94150.92430.98810.97261.11141.1049
TATA -0.0851-0.0525-0.0579-0.0419-0.0402-0.0474-0.0788-0.086-0.0918-0.0953
M-score -2.80-2.57-2.61-2.47-2.59-2.62-2.78-2.82-2.94-2.84
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