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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

SPLS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -0.94
Current: -2.94

-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 * 1.0476+0.528 * 0.9953+0.404 * 0.9154+0.892 * 0.9628+0.115 * 0.9104
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0429+4.679 * -0.0854-0.327 * 1.0553
=-2.94

* 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 $1,865 Mil.
Revenue was 5262 + 5656.467 + 5961.531 + 5220.103 = $22,100 Mil.
Gross Profit was 1347 + 1486.423 + 1596.276 + 1308.043 = $5,738 Mil.
Total Current Assets was $5,381 Mil.
Total Assets was $10,438 Mil.
Property, Plant and Equipment(Net PPE) was $1,644 Mil.
Depreciation, Depletion and Amortization(DDA) was $468 Mil.
Selling, General & Admin. Expense(SGA) was $4,765 Mil.
Total Current Liabilities was $3,391 Mil.
Long-Term Debt was $1,020 Mil.
Net Income was 59 + -260.351 + 216.792 + 81.875 = $97 Mil.
Non Operating Income was 1 + 1.565 + -2.538 + 4.504 = $5 Mil.
Cash Flow from Operations was 300 + 134.76 + 604.6 + -55.422 = $984 Mil.
Accounts Receivable was $1,849 Mil.
Revenue was 5654 + 5873.273 + 6111.695 + 5314.724 = $22,954 Mil.
Gross Profit was 1410 + 1507.053 + 1654.726 + 1359.496 = $5,931 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.



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)
=(1865 / 22100.101) / (1849.06 / 22953.692)
=0.08438875 / 0.0805561
=1.0476

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)
=(1486.423 / 22953.692) / (1347 / 22100.101)
=0.25840179 / 0.25962515
=0.9953

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 - (5381 + 1644) / 10438) / (1 - (5530.295 + 1825.723) / 11443.46)
=0.32697835 / 0.35718585
=0.9154

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
=22100.101 / 22953.692
=0.9628

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))
=(461.277 / (461.277 + 1825.723)) / (467.872 / (467.872 + 1644))
=0.20169523 / 0.22154373
=0.9104

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)
=(4765.286 / 22100.101) / (4745.754 / 22953.692)
=0.21562282 / 0.20675341
=1.0429

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)
=((1020 + 3391) / 10438) / ((1016.897 + 3565.749) / 11443.46)
=0.42259053 / 0.40045983
=1.0553

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
=(97.316 - 4.531 - 983.938) / 10438
=-0.0854

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 -2.94 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 1.06821.10661.06941.87930.93551.0671.02090.91631.06821.0774
GMI 0.99620.99650.99821.05881.01480.99090.99891.0121.02021.0119
AQI 0.99071.00241.08231.48541.02810.97090.98960.88981.08510.915
SGI 1.11281.12951.06671.19161.05161.01111.01940.97440.94810.9731
DEPI 1.00671.00470.96170.78890.95071.07871.00190.9461.01070.9152
SGAI 0.9870.98651.00560.97491.00760.99021.00790.99291.02261.0453
LVGI 0.99840.95070.88351.59560.87870.990.93161.0450.88561.0701
TATA -0.0534-0.0225-0.0402-0.0668-0.0984-0.0399-0.0438-0.1093-0.0437-0.0885
M-score -2.57-2.35-2.48-1.80-2.90-2.60-2.63-3.15-2.59-2.92

Staples Inc Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 0.91090.91930.93791.02731.07451.11931.14011.08651.07741.0476
GMI 1.01531.01751.01641.01831.01691.02351.02511.02311.01190.9953
AQI 0.88980.8690.89380.9861.08511.08051.07051.04380.9150.9154
SGI 0.98010.97120.97640.97510.94250.94720.95050.95380.97310.9628
DEPI 0.9460.9280.92180.991.01071.01571.0150.96510.91520.9104
SGAI 0.99370.98870.9870.99191.02191.03251.04091.04611.04521.0429
LVGI 1.0451.08031.04551.02710.88560.89980.91250.91731.07011.0553
TATA -0.1093-0.1271-0.1218-0.0513-0.0437-0.0504-0.0489-0.0478-0.0884-0.0854
M-score -3.15-3.25-3.18-2.72-2.59-2.58-2.56-2.62-2.91-2.94
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