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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

SPLS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -1.74
Current: -2.79

-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 -2.61.


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 * 1.0519+0.528 * 0.9847+0.404 * 0.9642+0.892 * 0.9363+0.115 * 0.964
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0201+4.679 * -0.0576-0.327 * 1.0075
=-2.79

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $1,899 Mil.
Revenue was 5268 + 5593 + 4937 + 5262 = $21,060 Mil.
Gross Profit was 1382 + 1522 + 1264 + 1347 = $5,515 Mil.
Total Current Assets was $5,112 Mil.
Total Assets was $10,172 Mil.
Property, Plant and Equipment(Net PPE) was $1,586 Mil.
Depreciation, Depletion and Amortization(DDA) was $455 Mil.
Selling, General & Admin. Expense(SGA) was $4,600 Mil.
Total Current Liabilities was $3,264 Mil.
Long-Term Debt was $1,018 Mil.
Net Income was 86 + 198 + 36 + 59 = $379 Mil.
Non Operating Income was -4 + -8 + -2 + 1 = $-13 Mil.
Cash Flow from Operations was 275 + 403 + 0 + 300 = $978 Mil.
Accounts Receivable was $1,928 Mil.
Revenue was 5656 + 5962 + 5220 + 5654 = $22,492 Mil.
Gross Profit was 1486 + 1596 + 1308 + 1410 = $5,800 Mil.
Total Current Assets was $4,951 Mil.
Total Assets was $10,308 Mil.
Property, Plant and Equipment(Net PPE) was $1,706 Mil.
Depreciation, Depletion and Amortization(DDA) was $467 Mil.
Selling, General & Admin. Expense(SGA) was $4,816 Mil.
Total Current Liabilities was $3,289 Mil.
Long-Term Debt was $1,018 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)
=(1899 / 21060) / (1928 / 22492)
=0.09017094 / 0.08571937
=1.0519

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)
=(1522 / 22492) / (1382 / 21060)
=0.25786946 / 0.26187085
=0.9847

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 - (5112 + 1586) / 10172) / (1 - (4951 + 1706) / 10308)
=0.34152576 / 0.35419092
=0.9642

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
=21060 / 22492
=0.9363

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))
=(467 / (467 + 1706)) / (455 / (455 + 1586))
=0.21491026 / 0.22292994
=0.964

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)
=(4600 / 21060) / (4816 / 22492)
=0.21842355 / 0.21412058
=1.0201

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)
=((1018 + 3264) / 10172) / ((1018 + 3289) / 10308)
=0.4209595 / 0.41783081
=1.0075

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
=(379 - -13 - 978) / 10172
=-0.0576

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 -2.79 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1.10661.06941.87930.93551.0671.02090.91631.06821.07761.052
GMI 0.99650.99821.05881.01480.99090.99891.0121.02021.01190.985
AQI 1.00241.08231.48541.02810.97090.98960.88981.08510.97380.9642
SGI 1.12951.06671.19161.05161.01111.01940.97440.94810.97310.9363
DEPI 1.00470.96170.78890.95071.07871.00190.9461.01070.91570.9638
SGAI 0.98651.00560.97491.00760.99021.00790.99291.02261.04531.0201
LVGI 0.95070.88351.59560.87870.990.93161.0450.88561.06881.0075
TATA -0.0225-0.0402-0.0668-0.0984-0.0399-0.0438-0.1093-0.0437-0.0886-0.0576
M-score -2.35-2.48-1.80-2.90-2.60-2.63-3.15-2.59-2.89-2.79

Staples Inc Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 1.01761.06821.11641.14011.08651.07761.04761.05931.06011.0519
GMI 1.02321.02021.0251.02521.02331.0120.99540.98570.97840.9847
AQI 0.9861.08511.08051.07051.04380.97380.91540.90030.91190.9642
SGI 0.98440.94810.94970.95040.95380.97310.96280.95440.94450.9363
DEPI 0.991.01111.01611.01450.96580.91510.90990.9050.9240.964
SGAI 0.99181.02261.03281.04081.0461.04521.04291.03651.03091.0201
LVGI 1.02710.88560.89980.91250.91731.06881.05531.0671.02361.0075
TATA -0.0513-0.0437-0.0504-0.0489-0.0478-0.0885-0.0854-0.0954-0.0772-0.0576
M-score -2.72-2.59-2.58-2.56-2.62-2.89-2.94-3.00-2.90-2.79
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