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Ross Stores Inc (NAS:ROST)
Beneish M-Score
-2.74 (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 -2.74 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: -2.74

-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 -2.64.


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 * 1.0191+0.528 * 1.0062+0.404 * 0.9274+0.892 * 1.0701+0.115 * 0.8694
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0036+4.679 * -0.0689-0.327 * 0.9308
=-2.74

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $96 Mil.
Revenue was 3088.995 + 3250.726 + 2782.855 + 2968.27 = $12,091 Mil.
Gross Profit was 912.79 + 864.135 + 779.508 + 848.79 = $3,405 Mil.
Total Current Assets was $2,629 Mil.
Total Assets was $5,114 Mil.
Property, Plant and Equipment(Net PPE) was $2,318 Mil.
Depreciation, Depletion and Amortization(DDA) was $285 Mil.
Selling, General & Admin. Expense(SGA) was $1,766 Mil.
Total Current Liabilities was $1,751 Mil.
Long-Term Debt was $396 Mil.
Net Income was 290.634 + 264.161 + 215.656 + 258.639 = $1,029 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 469.08 + 564.225 + 171.656 + 176.383 = $1,381 Mil.
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 $2,474 Mil.
Total Assets was $4,923 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.



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)
=(96.244 / 12090.846) / (88.258 / 11299.232)
=0.00796007 / 0.00781097
=1.0191

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)
=(3202.006 / 11299.232) / (3405.223 / 12090.846)
=0.28338262 / 0.28163645
=1.0062

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 - (2629.123 + 2318.456) / 5114.177) / (1 - (2473.776 + 2276.747) / 4923.459)
=0.03257572 / 0.0351249
=0.9274

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
=12090.846 / 11299.232
=1.0701

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))
=(239.81 / (239.81 + 2276.747)) / (285.39 / (285.39 + 2318.456))
=0.09529289 / 0.10960326
=0.8694

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)
=(1766.381 / 12090.846) / (1644.867 / 11299.232)
=0.14609242 / 0.14557335
=1.0036

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)
=((396.142 + 1750.896) / 5114.177) / ((395.677 + 1825.007) / 4923.459)
=0.41982082 / 0.45104143
=0.9308

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
=(1029.09 - 0 - 1381.344) / 5114.177
=-0.0689

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 -2.74 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.91761.16021.01220.970.93711.02381.03820.9981.08440.9292
GMI 10.99030.9630.91240.95170.98750.98670.99380.99780.998
AQI 1.11971.09480.86420.75680.98821.430.97080.99680.88220.9053
SGI 1.12661.07271.08551.10761.09491.09441.12931.05241.07931.0814
DEPI 1.16941.03470.94110.89861.02781.23081.03241.11581.06550.8852
SGAI 0.97411.01091.01810.9870.99320.9690.97641.00870.98050.9954
LVGI 1.15330.9360.95871.03190.99570.940.94540.92431.10710.9364
TATA -0.1125-0.039-0.118-0.161-0.038-0.0525-0.0525-0.0474-0.0956-0.0628
M-score -2.95-2.39-3.02-3.33-2.66-2.40-2.57-2.62-2.85-2.80

Ross Stores Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.9981.0441.03160.99381.08440.95880.94890.98270.92921.0191
GMI 0.99381.0011.00441.00160.99780.9870.99110.99060.9981.0062
AQI 0.99680.93260.94260.88370.88220.88790.8660.94440.90530.9274
SGI 1.05241.04711.0431.04881.07931.08951.09371.09041.08141.0701
DEPI 1.11581.11211.07581.10771.06551.04971.00380.90810.88520.8694
SGAI 1.00871.00861.00190.99840.98050.97770.98860.99330.99541.0036
LVGI 0.92430.9880.97251.11081.10711.08481.0640.9440.93640.9308
TATA -0.0474-0.0788-0.086-0.0918-0.0956-0.0648-0.0496-0.0302-0.0628-0.0689
M-score -2.62-2.78-2.82-2.94-2.85-2.81-2.75-2.58-2.80-2.74
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