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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.62 (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 -2.62 suggests that the company is not a manipulator.

SPLS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -0.94
Current: -2.62

-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 * 1.0865+0.528 * 1.0231+0.404 * 1.0438+0.892 * 0.9538+0.115 * 0.9651
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0462+4.679 * -0.0478-0.327 * 0.9173
=-2.62

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $1,965 Mil.
Revenue was 5961.531 + 5220.103 + 5654.259 + 5873.273 = $22,709 Mil.
Gross Profit was 1596.276 + 1308.043 + 1410.294 + 1507.053 = $5,822 Mil.
Total Current Assets was $5,599 Mil.
Total Assets was $11,304 Mil.
Property, Plant and Equipment(Net PPE) was $1,730 Mil.
Depreciation, Depletion and Amortization(DDA) was $463 Mil.
Selling, General & Admin. Expense(SGA) was $4,782 Mil.
Total Current Liabilities was $3,621 Mil.
Long-Term Debt was $1,026 Mil.
Net Income was 216.792 + 81.875 + 96.21 + 212.383 = $607 Mil.
Non Operating Income was -2.538 + 4.504 + 0.947 + 3.734 = $7 Mil.
Cash Flow from Operations was 604.6 + -56.273 + 359.851 + 233.147 = $1,141 Mil.
Accounts Receivable was $1,896 Mil.
Revenue was 6111.695 + 5314.724 + 5814.571 + 6567.98 = $23,809 Mil.
Gross Profit was 1654.726 + 1359.496 + 1511.01 + 1719.409 = $6,245 Mil.
Total Current Assets was $6,249 Mil.
Total Assets was $12,180 Mil.
Property, Plant and Equipment(Net PPE) was $1,827 Mil.
Depreciation, Depletion and Amortization(DDA) was $467 Mil.
Selling, General & Admin. Expense(SGA) was $4,792 Mil.
Total Current Liabilities was $4,457 Mil.
Long-Term Debt was $1,001 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)
=(1964.553 / 22709.166) / (1895.679 / 23808.97)
=0.08650925 / 0.07962037
=1.0865

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)
=(1308.043 / 23808.97) / (1596.276 / 22709.166)
=0.26228102 / 0.25635754
=1.0231

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 - (5598.635 + 1730.093) / 11304.403) / (1 - (6249.367 + 1826.624) / 12179.506)
=0.35169261 / 0.33691966
=1.0438

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
=22709.166 / 23808.97
=0.9538

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))
=(466.906 / (466.906 + 1826.624)) / (462.511 / (462.511 + 1730.093))
=0.20357527 / 0.21094142
=0.9651

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)
=(4781.526 / 22709.166) / (4791.892 / 23808.97)
=0.21055489 / 0.20126415
=1.0462

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)
=((1025.74 + 3620.722) / 11304.403) / ((1000.516 + 4457.072) / 12179.506)
=0.41103117 / 0.44809601
=0.9173

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
=(607.26 - 6.647 - 1141.325) / 11304.403
=-0.0478

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 -2.62 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 1.06111.06821.10661.06941.87930.93551.0671.02090.91631.0682
GMI 0.95010.99620.99650.99821.05881.01480.99090.99891.0121.0202
AQI 1.02260.99071.00241.08231.48541.02810.97090.98960.88981.0851
SGI 1.11421.11281.12951.06671.19161.05161.01111.01940.97440.9481
DEPI 1.06621.00671.00470.96170.78890.95071.07871.00190.9461.0107
SGAI 1.01240.9870.98651.00560.97491.00760.99021.00790.99291.0226
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 -2.63-2.57-2.35-2.48-1.80-2.90-2.60-2.63-3.15-2.59

Staples Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 0.95610.9110.91090.91930.93791.02731.07451.11931.14011.0865
GMI 1.00231.00891.01531.01751.01641.01831.01691.02351.02511.0231
AQI 0.96170.89640.88980.8690.89380.9861.08511.08051.07051.0438
SGI 0.98750.97750.98010.97120.97640.97510.94250.94720.95050.9538
DEPI 0.9830.93930.9460.9280.92180.991.01071.01541.0150.9651
SGAI 1.00250.99950.99370.98870.9870.99191.02191.03251.04091.0462
LVGI 0.98291.03081.0451.08031.04551.02710.88560.89980.91250.9173
TATA -0.0469-0.1135-0.1093-0.1271-0.1218-0.0513-0.0437-0.0505-0.0489-0.0478
M-score -2.76-3.17-3.15-3.25-3.18-2.72-2.59-2.58-2.56-2.62
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