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Staples Inc (NAS:SPLS)
Beneish M-Score
-2.78 (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 -2.78 suggests that the company is not a manipulator.

SPLS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -0.94
Current: -2.78

-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 -2.59.


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 * 1.0674+0.528 * 0.9791+0.404 * 0.9119+0.892 * 0.938+0.115 * 0.9246
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0188+4.679 * -0.0519-0.327 * 1.0236
=-2.78

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $1,967 Mil.
Revenue was 5593 + 4937 + 5262 + 0 = $15,792 Mil.
Gross Profit was 1522 + 1264 + 1347 + 0 = $4,133 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 $3,466 Mil.
Total Current Liabilities was $3,325 Mil.
Long-Term Debt was $1,016 Mil.
Net Income was 198 + 36 + 59 + 0 = $293 Mil.
Non Operating Income was -8 + -2 + 1 + 0 = $-9 Mil.
Cash Flow from Operations was 403 + 0 + 300 + 134.938 = $838 Mil.
Accounts Receivable was $1,965 Mil.
Revenue was 5962 + 5220 + 5654 + 0 = $16,836 Mil.
Gross Profit was 1596 + 1308 + 1410 + 0 = $4,314 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 $462 Mil.
Selling, General & Admin. Expense(SGA) was $3,627 Mil.
Total Current Liabilities was $3,621 Mil.
Long-Term Debt was $1,026 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)
=(1967 / 15792) / (1964.553 / 16836)
=0.12455674 / 0.11668763
=1.0674

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)
=(1264 / 16836) / (1522 / 15792)
=0.25623664 / 0.26171479
=0.9791

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 - (5439 + 1570) / 10318) / (1 - (5598.635 + 1730.093) / 11304.403)
=0.32070169 / 0.35169261
=0.9119

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
=15792 / 16836
=0.938

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))
=(462.319 / (462.319 + 1730.093)) / (463.872 / (463.872 + 1570))
=0.21087232 / 0.22807335
=0.9246

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)
=(3466 / 15792) / (3627 / 16836)
=0.21947822 / 0.21543122
=1.0188

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)
=((1016 + 3325) / 10318) / ((1025.74 + 3620.722) / 11304.403)
=0.42072107 / 0.41103117
=1.0236

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
=(293 - -9 - 837.938) / 10318
=-0.0519

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 -2.78 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

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 0.93971.03491.04631.09261.11531.06131.07371.04771.06271.0674
GMI 1.02061.02071.02071.0271.02711.02431.02431.0020.98890.9791
AQI 0.89380.9861.08511.08051.07051.04380.9150.91540.90030.9119
SGI 0.97450.96790.96790.97040.97160.97650.97650.96270.95140.938
DEPI 0.92180.991.01071.01571.01410.96540.91520.91040.90550.9246
SGAI 0.99741.00721.00721.02041.03071.03711.03711.03421.02591.0188
LVGI 1.04551.02710.88560.89980.91250.91731.07011.05531.0671.0236
TATA -0.1354-0.0647-0.0624-0.0686-0.0674-0.0663-0.0631-0.0604-0.0701-0.0519
M-score -3.25-2.79-2.68-2.66-2.65-2.71-2.79-2.82-2.88-2.78
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