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Staples Inc (NAS:SPLS)
Beneish M-Score
-3.27 (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 -3.27 suggests that the company is not a manipulator.

SPLS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.3   Max: -0.94
Current: -3.27

-3.3
-0.94

During the past 13 years, the highest Beneish M-Score of Staples Inc was -0.94. The lowest was -3.30. And the median was -2.61.


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 * 0.9932+0.528 * 1.0112+0.404 * 0.8773+0.892 * 0.9547+0.115 * 0.9536
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9926+4.679 * -0.1425-0.327 * 1.0799
=-3.27

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $1,865 Mil.
Revenue was 5355 + 4752 + 5101 + 5268 = $20,476 Mil.
Gross Profit was 1443 + 1192 + 1288 + 1382 = $5,305 Mil.
Total Current Assets was $5,334 Mil.
Total Assets was $9,387 Mil.
Property, Plant and Equipment(Net PPE) was $1,412 Mil.
Depreciation, Depletion and Amortization(DDA) was $444 Mil.
Selling, General & Admin. Expense(SGA) was $4,411 Mil.
Total Current Liabilities was $3,241 Mil.
Long-Term Debt was $1,024 Mil.
Net Income was 179 + -766 + 41 + 86 = $-460 Mil.
Non Operating Income was -4 + -22 + 3 + -4 = $-27 Mil.
Cash Flow from Operations was 641 + -287 + 276 + 275 = $905 Mil.
Accounts Receivable was $1,967 Mil.
Revenue was 5593 + 4937 + 5262 + 5656 = $21,448 Mil.
Gross Profit was 1522 + 1264 + 1347 + 1486 = $5,619 Mil.
Total Current Assets was $5,439 Mil.
Total Assets was $10,318 Mil.
Property, Plant and Equipment(Net PPE) was $1,570 Mil.
Depreciation, Depletion and Amortization(DDA) was $464 Mil.
Selling, General & Admin. Expense(SGA) was $4,655 Mil.
Total Current Liabilities was $3,325 Mil.
Long-Term Debt was $1,016 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 / 20476) / (1967 / 21448)
=0.09108224 / 0.09171018
=0.9932

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)
=(5619 / 21448) / (5305 / 20476)
=0.26198247 / 0.25908381
=1.0112

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 - (5334 + 1412) / 9387) / (1 - (5439 + 1570) / 10318)
=0.28134654 / 0.32070169
=0.8773

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
=20476 / 21448
=0.9547

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))
=(464 / (464 + 1570)) / (444 / (444 + 1412))
=0.22812193 / 0.23922414
=0.9536

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)
=(4411 / 20476) / (4655 / 21448)
=0.21542293 / 0.21703655
=0.9926

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)
=((1024 + 3241) / 9387) / ((1016 + 3325) / 10318)
=0.45435176 / 0.42072107
=1.0799

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
=(-460 - -27 - 905) / 9387
=-0.1425

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 -3.27 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 local exchange's currency.

Staples Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.10661.06941.87930.93551.08511.01840.90321.06821.07761.052
GMI 0.99650.99821.05881.01480.98490.99831.01871.02021.01180.985
AQI 1.00241.08231.48541.02810.97090.98960.88981.08510.97380.9642
SGI 1.12951.06671.19161.05160.99421.02190.98850.94810.97310.9363
DEPI 1.00470.96170.78890.95071.07871.00190.9461.01110.91510.964
SGAI 0.98651.00560.97491.00760.99051.01070.991.02261.04521.0201
LVGI 0.95070.88351.59560.87870.990.93161.0450.88561.06881.0075
TATA -0.0225-0.0402-0.0668-0.0984-0.0399-0.0438-0.1093-0.0437-0.0885-0.0576
M-score -2.35-2.48-1.80-2.90-2.60-2.63-3.14-2.59-2.89-2.79

Staples Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.14011.08651.07761.04761.05931.06011.05191.04671.02270.9932
GMI 1.02521.02331.0120.99540.98570.97840.98470.99441.00391.0112
AQI 1.07051.04380.97380.91540.90030.91190.96421.42570.8990.8773
SGI 0.95040.95380.97310.96280.95440.94450.93630.94570.94940.9547
DEPI 1.01450.96580.91510.90990.9050.9240.9640.98580.97270.9536
SGAI 1.04081.0461.04521.04291.03651.03091.02011.00981.00410.9926
LVGI 0.91250.91731.06881.05531.0671.02361.00751.25731.0851.0799
TATA -0.0489-0.0478-0.0885-0.0854-0.0954-0.0772-0.0576-0.0454-0.1136-0.1425
M-score -2.56-2.62-2.89-2.94-3.00-2.90-2.79-2.62-3.11-3.27
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