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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

SPLS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -1.74
Current: -2.59

-3.27
-1.74

During the past 13 years, the highest Beneish M-Score of Staples Inc was -1.74. The lowest was -3.27. And the median was -2.60.


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 * 1.0682+0.528 * 1.0202+0.404 * 1.0851+0.892 * 0.9481+0.115 * 1.0107
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0226+4.679 * -0.0437-0.327 * 0.8856
=-2.59

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

This Year (Jan14) TTM:Last Year (Jan13) TTM:
Accounts Receivable was $1,839 Mil.
Revenue was 5873.273 + 6111.695 + 5314.724 + 5814.571 = $23,114 Mil.
Gross Profit was 1507.053 + 1654.726 + 1359.496 + 1511.01 = $6,032 Mil.
Total Current Assets was $5,240 Mil.
Total Assets was $11,175 Mil.
Property, Plant and Equipment(Net PPE) was $1,871 Mil.
Depreciation, Depletion and Amortization(DDA) was $458 Mil.
Selling, General & Admin. Expense(SGA) was $4,735 Mil.
Total Current Liabilities was $3,368 Mil.
Long-Term Debt was $1,000 Mil.
Net Income was 212.383 + 135.228 + 102.531 + 169.927 = $620 Mil.
Non Operating Income was 3.734 + 3.975 + -4.434 + -3.375 = $-0 Mil.
Cash Flow from Operations was 233.147 + 527.574 + -0.004 + 347.569 = $1,108 Mil.
Accounts Receivable was $1,816 Mil.
Revenue was 6567.98 + 6353.14 + 5433.969 + 6025.421 = $24,381 Mil.
Gross Profit was 1719.409 + 1751.854 + 1419.415 + 1600.583 = $6,491 Mil.
Total Current Assets was $6,200 Mil.
Total Assets was $12,280 Mil.
Property, Plant and Equipment(Net PPE) was $1,963 Mil.
Depreciation, Depletion and Amortization(DDA) was $487 Mil.
Selling, General & Admin. Expense(SGA) was $4,884 Mil.
Total Current Liabilities was $4,419 Mil.
Long-Term Debt was $1,002 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)
=(1838.714 / 23114.263) / (1815.586 / 24380.51)
=0.07954889 / 0.07446875
=1.0682

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)
=(1654.726 / 24380.51) / (1507.053 / 23114.263)
=0.26624796 / 0.26097674
=1.0202

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 - (5239.558 + 1870.719) / 11174.876) / (1 - (6200.437 + 1963.175) / 12280.005)
=0.36372654 / 0.33521102
=1.0851

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
=23114.263 / 24380.51
=0.9481

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))
=(487.313 / (487.313 + 1963.175)) / (458.218 / (458.218 + 1870.719))
=0.19886365 / 0.19674985
=1.0107

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)
=(4735.294 / 23114.263) / (4884.284 / 24380.51)
=0.20486459 / 0.2003356
=1.0226

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)
=((1000.205 + 3368.45) / 11174.876) / ((1001.943 + 4418.625) / 12280.005)
=0.39093543 / 0.44141415
=0.8856

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
=(620.069 - -0.1 - 1108.286) / 11174.876
=-0.0437

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 -2.59 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

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 1.06761.01090.96980.95270.90130.90990.91240.92581.01761.0682
GMI 0.9971.00170.9991.00161.01191.01531.02121.02311.02321.0202
AQI 0.99070.98960.9580.96170.89640.88980.8690.89380.9861.0851
SGI 0.99771.02951.01860.9910.98810.98120.97850.98910.98440.9481
DEPI 1.03431.00190.98170.9830.93930.9460.9280.92180.991.0107
SGAI 1.0121.01051.00841.00420.99710.99020.98590.98480.99181.0226
LVGI 0.90790.93160.97560.98291.03081.0451.08031.04551.02710.8856
TATA -0.0408-0.0438-0.0401-0.0469-0.1135-0.1093-0.1271-0.1218-0.0513-0.0437
M-score -2.58-2.63-2.69-2.76-3.16-3.15-3.25-3.18-2.72-2.59
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