RH Beneish M-Score Historical Data
The historical data trend for RH's Beneish M-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
RH Beneish M-Score Chart
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RH Annual Data
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Jan24 |
| Beneish M-Score |
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-3.10 |
-2.20 |
-2.44 |
-2.06 |
-2.47 |
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RH Quarterly Data
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Jan24 |
| Beneish M-Score |
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-2.06 |
-2.94 |
-3.03 |
-2.95 |
-2.47 |
Competitive Comparison of RH's Beneish M-Score
For the Specialty Retail subindustry, RH's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
RH's Beneish M-Score Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, RH's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where RH's Beneish M-Score falls into.
RH Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 RH 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 * 1.1586 | + | 0.528 * 1.1006 | + | 0.404 * 1.3326 | + | 0.892 * 0.8437 | + | 0.115 * 1.004 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.1126 | + | 4.679 * -0.017755 | - | 0.327 * 1.2562 |
| = | -2.47 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Jan24) TTM: | Last Year (Jan23) TTM: |
Total Receivables was $94 Mil.
Revenue was 738.26 + 751.225 + 800.479 + 739.162 = $3,029 Mil.
Gross Profit was 320.951 + 340.45 + 380.073 + 347.545 = $1,389 Mil.
Total Current Assets was $1,102 Mil.
Total Assets was $4,144 Mil.
Property, Plant and Equipment(Net PPE) was $2,431 Mil.
Depreciation, Depletion and Amortization(DDA) was $119 Mil.
Selling, General, & Admin. Expense(SGA) was $1,023 Mil.
Total Current Liabilities was $873 Mil.
Long-Term Debt & Capital Lease Obligation was $3,549 Mil.
Net Income was 11.381 + -2.187 + 76.477 + 41.89 = $128 Mil.
Non Operating Income was 3.388 + -5.305 + 0.186 + 0.653 = $-1 Mil.
Cash Flow from Operations was -113.958 + 67.817 + 161.617 + 86.738 = $202 Mil.
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Total Receivables was $96 Mil.
Revenue was 772.499 + 869.066 + 991.62 + 957.292 = $3,590 Mil.
Gross Profit was 369.406 + 420.778 + 523.218 + 498.583 = $1,812 Mil.
Total Current Assets was $2,513 Mil.
Total Assets was $5,309 Mil.
Property, Plant and Equipment(Net PPE) was $2,209 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General, & Admin. Expense(SGA) was $1,090 Mil.
Total Current Liabilities was $886 Mil.
Long-Term Debt & Capital Lease Obligation was $3,624 Mil.
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1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (93.597 / 3029.126) | / | (95.755 / 3590.477) |
| = | 0.030899 | / | 0.026669 |
| | = | 1.1586 |
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) |
| = | (1811.985 / 3590.477) | / | (1389.019 / 3029.126) |
| = | 0.504664 | / | 0.458554 |
| | = | 1.1006 |
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 Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (1101.902 + 2430.556) / 4143.897) | / | (1 - (2512.664 + 2208.741) / 5309.289) |
| = | 0.147552 | / | 0.110727 |
| | = | 1.3326 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 |
| = | 3029.126 | / | 3590.477 |
| | = | 0.8437 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
| = | (108.588 / (108.588 + 2208.741)) | / | (118.989 / (118.989 + 2430.556)) |
| = | 0.046859 | / | 0.046671 |
| | = | 1.004 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (1022.948 / 3029.126) | / | (1089.828 / 3590.477) |
| = | 0.337704 | / | 0.303533 |
| | = | 1.1126 |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((3549.342 + 872.868) / 4143.897) | / | ((3624.266 + 885.973) / 5309.289) |
| = | 1.067162 | / | 0.8495 |
| | = | 1.2562 |
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 |
| = | (127.561 - -1.078 | - | 202.214) | / | 4143.897 |
| | = | -0.017755 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
RH has a M-score of -2.47 suggests that the company is unlikely to be a manipulator.
RH (LTS:0KTF) Business Description
Traded in Other Exchanges
Address
15 Koch Road, Suite K, Corte Madera, CA, USA, 94925
RH is a luxury retailer operating in the $143 billion domestic furniture and home furnishing industry. The firm offers merchandise across many categories including furniture, lighting, textiles, bath, decor, children, and is growing the presence of its hospitality business (with 15 restaurant locations). RH innovates, curates, and integrates products, categories, services, and businesses across channels and brand extensions (RH Teen, RH Modern, and Waterworks, for example). RH is fully integrated across store, Web, and catalog channels, and is positioned to broaden its total addressable market over the next decade with its World of RH digital platform (highlighting offerings outside of home furnishings), along with future offerings in color, bespoke furniture, architeture, media, and more.
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