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GuruFocus has detected 3 Warning Signs with Dick's Sporting Goods Inc $DKS.
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Dick's Sporting Goods Inc (NYSE:DKS)
Beneish M-Score
-3.18 (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.

Dick's Sporting Goods Inc has a M-score of -3.18 suggests that the company is not a manipulator.

DKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.73   Max: -0.19
Current: -3.18

-3.73
-0.19

During the past 13 years, the highest Beneish M-Score of Dick's Sporting Goods Inc was -0.19. The lowest was -3.73. And the median was -2.60.


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 Dick's Sporting Goods 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 * 0.6989+0.528 * 1.0058+0.404 * 1.1369+0.892 * 1.0979+0.115 * 0.9378
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0605+4.679 * -0.1187-0.327 * 0.9975
=-3.18

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

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $86 Mil.
Revenue was 1825.252 + 2483.433 + 1810.347 + 1967.857 = $8,087 Mil.
Gross Profit was 541.865 + 719.764 + 552.843 + 597.378 = $2,412 Mil.
Total Current Assets was $2,255 Mil.
Total Assets was $4,333 Mil.
Property, Plant and Equipment(Net PPE) was $1,569 Mil.
Depreciation, Depletion and Amortization(DDA) was $239 Mil.
Selling, General & Admin. Expense(SGA) was $1,963 Mil.
Total Current Liabilities was $1,514 Mil.
Long-Term Debt was $97 Mil.
Net Income was 58.195 + 90.188 + 48.914 + 91.417 = $289 Mil.
Non Operating Income was 2.879 + 6.649 + 3.778 + 1.93 = $15 Mil.
Cash Flow from Operations was 36.472 + 574.521 + -38.467 + 215.39 = $788 Mil.
Accounts Receivable was $112 Mil.
Revenue was 1660.343 + 2240.051 + 1642.627 + 1822.979 = $7,366 Mil.
Gross Profit was 495.797 + 671.966 + 488.376 + 553.558 = $2,210 Mil.
Total Current Assets was $2,071 Mil.
Total Assets was $3,878 Mil.
Property, Plant and Equipment(Net PPE) was $1,406 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $1,686 Mil.
Total Current Liabilities was $1,283 Mil.
Long-Term Debt was $163 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)
=(85.918 / 8086.889) / (111.973 / 7366)
=0.01062436 / 0.01520133
=0.6989

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)
=(2209.697 / 7366) / (2411.85 / 8086.889)
=0.29998602 / 0.29824201
=1.0058

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 - (2254.616 + 1568.523) / 4332.724) / (1 - (2070.678 + 1406.471) / 3878.367)
=0.11761308 / 0.10345024
=1.1369

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
=8086.889 / 7366
=1.0979

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))
=(199.008 / (199.008 + 1406.471)) / (238.888 / (238.888 + 1568.523))
=0.12395553 / 0.13217138
=0.9378

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)
=(1962.64 / 8086.889) / (1685.705 / 7366)
=0.24269407 / 0.22884944
=1.0605

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)
=((96.97 + 1514.483) / 4332.724) / ((162.78 + 1283.31) / 3878.367)
=0.37192607 / 0.37286054
=0.9975

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
=(288.714 - 15.236 - 787.916) / 4332.724
=-0.1187

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.

Dick's Sporting Goods Inc has a M-score of -3.18 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 local exchange's currency.

Dick's Sporting Goods Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1.25190.87720.57380.89421.02450.80651.64881.20450.71661.1242
GMI 0.96681.03881.03960.92710.9720.97211.00611.02181.021.0053
AQI 1.47520.86960.91620.83480.87111.33930.76350.96150.97551.1878
SGI 1.24861.06221.06841.10391.06991.11981.06461.09681.0671.0895
DEPI 0.9210.86421.04140.95281.06521.00551.03680.96331.03320.9433
SGAI 1.01890.99990.97241.05220.95361.00871.00630.99311.00761.0672
LVGI 0.94690.87361.0310.91190.95940.95670.94071.00941.01411.0273
TATA -0.053-0.1024-0.1194-0.0809-0.0535-0.0415-0.0256-0.0787-0.0879-0.1198
M-score -2.10-3.02-3.38-2.95-2.68-2.61-2.02-2.58-3.09-2.79

Dick's Sporting Goods Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 1.20450.87460.95561.00640.71661.65191.27471.17721.12420.6989
GMI 1.02181.0251.00711.00081.021.01571.02031.01451.00531.0058
AQI 0.96150.98310.93990.90380.97550.92661.03011.07051.18781.1369
SGI 1.09681.09851.09251.08921.0671.06121.06161.06781.08951.0979
DEPI 0.96330.97631.05641.03981.03321.06261.02430.99970.94330.9378
SGAI 0.99311.00570.98650.99631.00761.01121.02861.0371.06721.0605
LVGI 1.00941.04561.00121.03111.01411.01311.05420.95281.02730.9975
TATA -0.0787-0.0844-0.0818-0.0649-0.0879-0.0751-0.0854-0.0896-0.1198-0.1187
M-score -2.58-2.91-2.83-2.74-3.09-2.20-2.57-2.63-2.79-3.18
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