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Staples Inc (NAS:SPLS)
Beneish M-Score
-3.00 (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 -3.00 suggests that the company is not a manipulator.

SPLS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -0.94
Current: -3

-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 * 1.0594+0.528 * 0.9856+0.404 * 0.9003+0.892 * 0.9544+0.115 * 0.9055
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0365+4.679 * -0.0954-0.327 * 1.067
=-3.00

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

This Year (Jul15) TTM:Last Year (Jul14) TTM:
Accounts Receivable was $1,862 Mil.
Revenue was 4937 + 5262 + 5656.467 + 5961.531 = $21,817 Mil.
Gross Profit was 1264 + 1347 + 1486.423 + 1596.276 = $5,694 Mil.
Total Current Assets was $5,374 Mil.
Total Assets was $10,326 Mil.
Property, Plant and Equipment(Net PPE) was $1,597 Mil.
Depreciation, Depletion and Amortization(DDA) was $469 Mil.
Selling, General & Admin. Expense(SGA) was $4,716 Mil.
Total Current Liabilities was $3,412 Mil.
Long-Term Debt was $1,018 Mil.
Net Income was 36 + 59 + -260.351 + 216.792 = $51 Mil.
Non Operating Income was -2 + 1 + 1.565 + -2.538 = $-2 Mil.
Cash Flow from Operations was 0 + 300 + 134.76 + 604.178 = $1,039 Mil.
Accounts Receivable was $1,842 Mil.
Revenue was 5220 + 5654 + 5873.273 + 6111.695 = $22,859 Mil.
Gross Profit was 1308 + 1410 + 1507.053 + 1654.726 = $5,880 Mil.
Total Current Assets was $5,432 Mil.
Total Assets was $11,278 Mil.
Property, Plant and Equipment(Net PPE) was $1,776 Mil.
Depreciation, Depletion and Amortization(DDA) was $459 Mil.
Selling, General & Admin. Expense(SGA) was $4,767 Mil.
Total Current Liabilities was $3,519 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)
=(1862 / 21816.998) / (1841.614 / 22858.968)
=0.0853463 / 0.08056418
=1.0594

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)
=(1347 / 22858.968) / (1264 / 21816.998)
=0.25721979 / 0.26097536
=0.9856

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 - (5374 + 1597) / 10326) / (1 - (5431.874 + 1776.144) / 11278.024)
=0.324908 / 0.36087935
=0.9003

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
=21816.998 / 22858.968
=0.9544

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))
=(459.441 / (459.441 + 1776.144)) / (468.872 / (468.872 + 1597))
=0.20551265 / 0.22696082
=0.9055

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)
=(4716.044 / 21816.998) / (4767.339 / 22858.968)
=0.21616375 / 0.20855443
=1.0365

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 + 3412) / 10326) / ((1015.699 + 3519.048) / 11278.024)
=0.42901414 / 0.40208701
=1.067

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
=(51.441 - -1.973 - 1038.938) / 10326
=-0.0954

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 -3.00 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 1.06821.10661.06941.87930.93551.08511.01840.90321.06821.0774
GMI 0.99620.99650.99821.05881.01480.98490.99831.01871.02021.0119
AQI 0.99071.00241.08231.48541.02810.97090.98960.88981.08510.915
SGI 1.11281.12951.06671.19161.05160.99421.02190.98850.94810.9731
DEPI 1.00671.00470.96170.78890.95071.07871.00190.9461.01070.9152
SGAI 0.9870.98651.00560.97491.00760.99051.01070.991.02261.0453
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 -2.57-2.35-2.48-1.80-2.90-2.60-2.63-3.14-2.59-2.92

Staples Inc Quarterly Data

Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15
DSRI 0.91240.92581.01761.06821.11641.14011.08651.07741.04761.0594
GMI 1.02121.02311.02321.02021.0251.02511.02311.01190.99530.9856
AQI 0.8690.89380.9861.08511.08051.07051.04380.9150.91540.9003
SGI 0.97850.98910.98440.94810.94970.95050.95380.97310.96280.9544
DEPI 0.9280.92180.991.01071.01571.01410.96510.91520.91040.9055
SGAI 0.98590.98480.99181.02261.03291.04091.04611.04521.04291.0365
LVGI 1.08031.04551.02710.88560.89980.91250.91731.07011.05531.067
TATA -0.1271-0.1218-0.0513-0.0437-0.0504-0.0489-0.0478-0.0885-0.0854-0.0954
M-score -3.25-3.18-2.72-2.59-2.58-2.56-2.62-2.92-2.94-3.00
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