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Beneish M-Score -1.09 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of TJX Companies Inc was -1.09. The lowest was -3.31. And the median was -2.72.
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 * 2.7673||+||0.528 * 0.9915||+||0.404 * 0.9979||+||0.892 * 1.0642||+||0.115 * 1.0234|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0418||+||4.679 * -0.0593||-||0.327 * 1.0257|
|This Year (Jan16) TTM:||Last Year (Jan15) TTM:|
|Accounts Receivable was $630 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 $11,500 Mil.
Property, Plant and Equipment(Net PPE) was $4,160 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 $1,624 Mil.
Net Income was 666.466 + 587.256 + 549.335 + 474.601 = $2,278 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1303.3 + 727.984 + 481.041 + 447.539 = $2,960 Mil.
|Accounts Receivable was $214 Mil.
Revenue was 8303.953 + 7366.066 + 6917.212 + 6491.176 = $29,078 Mil.
Gross Profit was 2344.916 + 2162.437 + 1981.356 + 1813.176 = $8,302 Mil.
Total Current Assets was $6,577 Mil.
Total Assets was $10,989 Mil.
Property, Plant and Equipment(Net PPE) was $3,868 Mil.
Depreciation, Depletion and Amortization(DDA) was $589 Mil.
Selling, General & Admin. Expense(SGA) was $4,695 Mil.
Total Current Liabilities was $3,930 Mil.
Long-Term Debt was $1,685 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(629.7 / 30944.938)||/||(213.824 / 29078.407)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2246.596 / 29078.407)||/||(2573.883 / 30944.938)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (6772.6 + 4159.9) / 11499.5)||/||(1 - (6577.444 + 3868.365) / 10988.75)|
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.
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))|
|=||(588.975 / (588.975 + 3868.365))||/||(616.706 / (616.706 + 4159.9))|
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)|
|=||(5205.715 / 30944.938)||/||(4695.384 / 29078.407)|
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)|
|=||((1624.1 + 4402.2) / 11499.5)||/||((1684.597 + 3929.634) / 10988.75)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(2277.658 - 0||-||2959.864)||/||11499.5|
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 -1.09 signals that the company is likely to be a manipulator.
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
TJX Companies Inc Annual Data
TJX Companies Inc Quarterly Data