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GuruFocus has detected 4 Warning Signs with TJX Companies Inc $TJX.
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TJX Companies Inc (NYSE:TJX)
Beneish M-Score
-1.55 (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.

TJX Companies Inc has a M-score of -1.55 signals that the company is a manipulator.

TJX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.18   Max: -1.55
Current: -1.55

-3.18
-1.55

During the past 13 years, the highest Beneish M-Score of TJX Companies Inc was -1.55. The lowest was -3.18. And the median was -2.70.


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 TJX Companies 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 * 2.4787+0.528 * 0.9935+0.404 * 0.9124+0.892 * 1.0723+0.115 * 1.0124
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0333+4.679 * -0.0951-0.327 * 1.0241
=-1.55

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $633 Mil.
Revenue was 9467.647 + 8291.688 + 7882.053 + 7542.356 = $33,184 Mil.
Gross Profit was 2680.87 + 2447.815 + 2319.092 + 2170.213 = $9,618 Mil.
Total Current Assets was $7,751 Mil.
Total Assets was $12,834 Mil.
Property, Plant and Equipment(Net PPE) was $4,483 Mil.
Depreciation, Depletion and Amortization(DDA) was $659 Mil.
Selling, General & Admin. Expense(SGA) was $5,768 Mil.
Total Current Liabilities was $4,758 Mil.
Long-Term Debt was $2,228 Mil.
Net Income was 677.928 + 549.786 + 562.174 + 508.346 = $2,298 Mil.
Non Operating Income was 0 + -82.946 + 0 + 0 = $-83 Mil.
Cash Flow from Operations was 1514.606 + 928.675 + 738.351 + 420.268 = $3,602 Mil.
Accounts Receivable was $238 Mil.
Revenue was 8962.075 + 7753.495 + 7363.731 + 6865.637 = $30,945 Mil.
Gross Profit was 2573.883 + 2246.596 + 2144.54 + 1945.396 = $8,910 Mil.
Total Current Assets was $6,773 Mil.
Total Assets was $11,499 Mil.
Property, Plant and Equipment(Net PPE) was $4,138 Mil.
Depreciation, Depletion and Amortization(DDA) was $617 Mil.
Selling, General & Admin. Expense(SGA) was $5,206 Mil.
Total Current Liabilities was $4,402 Mil.
Long-Term Debt was $1,709 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)
=(632.8 / 33183.744) / (238.072 / 30944.938)
=0.01906958 / 0.00769341
=2.4787

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)
=(8910.415 / 30944.938) / (9617.99 / 33183.744)
=0.28794419 / 0.28984041
=0.9935

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 - (7750.8 + 4483) / 12833.9) / (1 - (6772.56 + 4137.575) / 11499.482)
=0.04675897 / 0.05124987
=0.9124

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
=33183.744 / 30944.938
=1.0723

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))
=(616.696 / (616.696 + 4137.575)) / (658.8 / (658.8 + 4483))
=0.1297141 / 0.12812634
=1.0124

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)
=(5768.467 / 33183.744) / (5205.715 / 30944.938)
=0.17383412 / 0.16822509
=1.0333

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)
=((2227.6 + 4757.6) / 12833.9) / ((1709.268 + 4402.23) / 11499.482)
=0.54427727 / 0.53145855
=1.0241

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
=(2298.234 - -82.946 - 3601.9) / 12833.9
=-0.0951

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.

TJX Companies Inc has a M-score of -1.55 signals that the company is likely to 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.

TJX Companies Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.15980.96650.96671.24940.96580.97730.88990.95981.04622.4787
GMI 0.9861.01910.91740.97490.98430.96120.99720.99850.99150.9935
AQI 1.15061.00630.87991.03281.0151.15810.87020.93591.03730.9124
SGI 1.07211.03611.06781.08151.05691.11591.05971.06041.06421.0723
DEPI 1.07171.03880.96531.01871.03421.11281.02951.00241.01871.0124
SGAI 1.05770.9350.99421.03050.99210.97920.99180.99131.04181.0333
LVGI 1.04440.93150.96790.99610.94481.02610.98531.08761.04021.0241
TATA -0.0893-0.0467-0.1366-0.0794-0.0507-0.1208-0.0454-0.0707-0.0574-0.0951
M-score -2.65-2.65-3.17-2.55-2.68-2.91-2.78-2.85-2.66-1.55

TJX Companies Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.99480.95980.96961.01470.99051.04620.99561.02951.0372.4787
GMI 1.01370.99850.99190.98670.99050.99150.99120.99270.98480.9935
AQI 1.07070.93590.92360.94640.94961.03731.05011.06840.97790.9124
SGI 1.04561.06041.06231.06031.05961.06421.07361.07491.0791.0723
DEPI 1.01741.00241.02041.01781.01131.01871.01720.990.98221.0124
SGAI 0.98050.99130.99751.01461.02791.04181.04441.04421.05121.0333
LVGI 1.04081.08761.07481.03351.02141.04020.98440.98551.04461.0241
TATA -0.0541-0.0707-0.0643-0.0519-0.0484-0.0574-0.0511-0.0722-0.0776-0.0951
M-score -2.67-2.85-2.81-2.70-2.70-2.66-2.64-2.70-2.78-1.55
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