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GuruFocus has detected 5 Warning Signs with Sturm Ruger & Co Inc $RGR.
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Sturm Ruger & Co Inc (NYSE:RGR)
Beneish M-Score
-2.42 (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.

Sturm Ruger & Co Inc has a M-score of -2.42 suggests that the company is not a manipulator.

RGR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.86   Max: -1.78
Current: -2.42

-4.86
-1.78

During the past 13 years, the highest Beneish M-Score of Sturm Ruger & Co Inc was -1.78. The lowest was -4.86. And the median was -2.61.


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 Sturm Ruger & Co 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 * 0.9257+0.528 * 0.9849+0.404 * 1.4789+0.892 * 1.1215+0.115 * 0.9868
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9033+4.679 * -0.032-0.327 * 1.0893
=-2.42

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $77.6 Mil.
Revenue was 167.355 + 161.848 + 161.427 + 167.944 = $658.6 Mil.
Gross Profit was 55.753 + 53.496 + 50.251 + 56.694 = $216.2 Mil.
Total Current Assets was $170.9 Mil.
Total Assets was $304.1 Mil.
Property, Plant and Equipment(Net PPE) was $102.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.3 Mil.
Selling, General & Admin. Expense(SGA) was $84.1 Mil.
Total Current Liabilities was $78.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 22.224 + 20.83 + 19.85 + 23.515 = $86.4 Mil.
Non Operating Income was 0.354 + 0.767 + 0.418 + 0.293 = $1.8 Mil.
Cash Flow from Operations was 18.937 + 19.409 + 19.3 + 36.662 = $94.3 Mil.
Accounts Receivable was $74.7 Mil.
Revenue was 173.109 + 152.396 + 120.871 + 140.872 = $587.2 Mil.
Gross Profit was 59.113 + 48.243 + 34.011 + 48.508 = $189.9 Mil.
Total Current Assets was $201.0 Mil.
Total Assets was $325.4 Mil.
Property, Plant and Equipment(Net PPE) was $102.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.6 Mil.
Selling, General & Admin. Expense(SGA) was $83.0 Mil.
Total Current Liabilities was $77.0 Mil.
Long-Term Debt was $0.0 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)
=(77.593 / 658.574) / (74.746 / 587.248)
=0.11781971 / 0.12728183
=0.9257

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)
=(189.875 / 587.248) / (216.194 / 658.574)
=0.32333018 / 0.32827594
=0.9849

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 - (170.899 + 102.203) / 304.131) / (1 - (200.966 + 102.007) / 325.423)
=0.10202511 / 0.06898713
=1.4789

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
=658.574 / 587.248
=1.1215

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))
=(35.622 / (35.622 + 102.007)) / (36.337 / (36.337 + 102.203))
=0.25882626 / 0.26228526
=0.9868

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)
=(84.119 / 658.574) / (83.036 / 587.248)
=0.127729 / 0.14139852
=0.9033

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)
=((0 + 78.424) / 304.131) / ((0 + 77.038) / 325.423)
=0.25786257 / 0.23673188
=1.0893

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
=(86.419 - 1.832 - 94.308) / 304.131
=-0.032

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.

Sturm Ruger & Co Inc has a M-score of -2.42 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.

Sturm Ruger & Co Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.93011.42320.651.3381.03820.68111.11930.9331.42470.8032
GMI 0.55091.0660.72870.98240.96820.93410.96841.20930.99460.9452
AQI 0.58681.81850.66210.81970.58161.87081.00461.50730.71841.074
SGI 0.93361.15981.49320.94181.28841.49571.39940.79111.01221.2055
DEPI 00.97310.93151.03240.94641.01381.09740.67340.96271.0215
SGAI 1.34120.90080.94051.01040.95960.91030.88881.72030.6710.9088
LVGI 1.09421.31720.89070.90641.13651.41970.93310.74611.09350.8769
TATA -0.1623-0.0227-0.1386-0.0322-0.0896-0.1012-0.0322-0.0707-0.1651-0.0535
M-score -3.97-1.78-3.25-2.42-2.84-2.61-2.13-2.82-2.95-2.67

Sturm Ruger & Co Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.9331.23791.41931.33861.42471.0330.97491.05660.80320.9257
GMI 1.20931.25961.18921.08750.99460.90360.91790.92550.94520.9849
AQI 1.50731.1370.75520.54910.71840.66211.00591.21511.0741.4789
SGI 0.79110.72840.73740.86341.01221.1481.23171.25621.20551.1215
DEPI 0.67340.76180.85110.9630.96270.99310.9580.98911.02150.9868
SGAI 1.72031.80021.91741.76010.6710.66420.5830.58880.90880.9033
LVGI 0.74610.78821.10791.30271.09351.00560.89710.98170.87691.0893
TATA -0.0707-0.1643-0.2654-0.3087-0.1651-0.1252-0.0671-0.057-0.0535-0.032
M-score -2.82-3.18-3.78-4.10-2.95-3.04-2.55-2.34-2.67-2.42
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