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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.58 (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.

Staples Inc has a M-score of -2.58 suggests that the company is not a manipulator.

SPLS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -0.94
Current: -2.58

-3.27
-0.94

During the past 13 years, the highest Beneish M-Score of Staples Inc was -0.94. The lowest was -3.27. And the median was -2.58.


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 Staples 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 * 1.1163+0.528 * 1.025+0.404 * 1.0805+0.892 * 0.9497+0.115 * 1.0154
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0329+4.679 * -0.0505-0.327 * 0.8998
=-2.58

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $1,849 Mil.
Revenue was 5654.259 + 5873.273 + 6111.695 + 5314.724 = $22,954 Mil.
Gross Profit was 1410.294 + 1507.053 + 1654.726 + 1359.496 = $5,932 Mil.
Total Current Assets was $5,530 Mil.
Total Assets was $11,443 Mil.
Property, Plant and Equipment(Net PPE) was $1,826 Mil.
Depreciation, Depletion and Amortization(DDA) was $461 Mil.
Selling, General & Admin. Expense(SGA) was $4,746 Mil.
Total Current Liabilities was $3,566 Mil.
Long-Term Debt was $1,017 Mil.
Net Income was 96.21 + 212.383 + 135.228 + 102.531 = $546 Mil.
Non Operating Income was 0.947 + 3.734 + 3.975 + -4.434 = $4 Mil.
Cash Flow from Operations was 359.851 + 233.147 + 527.574 + -0.004 = $1,121 Mil.
Accounts Receivable was $1,744 Mil.
Revenue was 5814.571 + 6567.98 + 6353.14 + 5433.969 = $24,170 Mil.
Gross Profit was 1511.01 + 1719.409 + 1751.854 + 1419.415 = $6,402 Mil.
Total Current Assets was $6,323 Mil.
Total Assets was $12,256 Mil.
Property, Plant and Equipment(Net PPE) was $1,881 Mil.
Depreciation, Depletion and Amortization(DDA) was $485 Mil.
Selling, General & Admin. Expense(SGA) was $4,838 Mil.
Total Current Liabilities was $4,454 Mil.
Long-Term Debt was $1,000 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)
=(1849.06 / 22953.951) / (1744.074 / 24169.66)
=0.0805552 / 0.07215964
=1.1163

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)
=(1507.053 / 24169.66) / (1410.294 / 22953.951)
=0.26486463 / 0.25841168
=1.025

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 - (5530.295 + 1825.723) / 11443.46) / (1 - (6323.205 + 1881.317) / 12256.126)
=0.35718585 / 0.33057787
=1.0805

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
=22953.951 / 24169.66
=0.9497

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))
=(484.724 / (484.724 + 1881.317)) / (461.489 / (461.489 + 1825.723))
=0.20486712 / 0.20176923
=1.0154

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)
=(4745.901 / 22953.951) / (4838.077 / 24169.66)
=0.20675748 / 0.2001715
=1.0329

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)
=((1016.897 + 3565.749) / 11443.46) / ((1000.429 + 4454.01) / 12256.126)
=0.40045983 / 0.44503777
=0.8998

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
=(546.352 - 4.222 - 1120.568) / 11443.46
=-0.0505

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.

Staples 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.

Staples Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 1.06111.06821.10661.06941.87930.93551.08511.01840.90321.0682
GMI 0.95010.99620.99650.99821.05881.01480.98490.99831.01871.0202
AQI 1.02260.99071.00241.08231.48541.02810.97090.98960.88981.0851
SGI 1.11421.11281.12951.06671.19161.05160.99421.02190.98850.9481
DEPI 1.06621.00671.00470.96170.78890.95071.07871.00190.9461.0107
SGAI 1.01240.9870.98651.00560.97491.00760.99051.01070.991.0226
LVGI 0.94150.99840.95070.88351.59560.87870.990.93161.0450.8856
TATA -0.0667-0.0534-0.0225-0.0402-0.0668-0.0984-0.0399-0.0438-0.1093-0.0437
M-score -2.63-2.57-2.35-2.48-1.80-2.90-2.60-2.63-3.14-2.59

Staples Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 1.01090.96980.95270.90130.90990.91240.92581.01761.06821.1163
GMI 1.00170.9991.00161.01191.01531.02121.02311.02321.02021.025
AQI 0.98960.9580.96170.89640.88980.8690.89380.9861.08511.0805
SGI 1.02951.01860.9910.98810.98120.97850.98910.98440.94810.9497
DEPI 1.00190.98170.9830.93930.9460.9280.92180.991.01071.0154
SGAI 1.01051.00841.00420.99710.99020.98590.98480.99181.02261.0329
LVGI 0.93160.97560.98291.03081.0451.08031.04551.02710.88560.8998
TATA -0.0438-0.0401-0.0469-0.1135-0.1093-0.1271-0.1218-0.0513-0.0437-0.0505
M-score -2.63-2.69-2.76-3.16-3.15-3.25-3.18-2.72-2.59-2.58
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