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GuruFocus has detected 7 Warning Signs with Roper Technologies Inc $ROP.
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Roper Technologies Inc (NYSE:ROP)
Beneish M-Score
-2.67 (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.

Roper Technologies Inc has a M-score of -2.67 suggests that the company is not a manipulator.

ROP' s Beneish M-Score Range Over the Past 10 Years
Min: -2.95   Max: -1.96
Current: -2.67

-2.95
-1.96

During the past 13 years, the highest Beneish M-Score of Roper Technologies Inc was -1.96. The lowest was -2.95. And the median was -2.53.


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 Roper Technologies 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 * 0.9732+0.528 * 0.9924+0.404 * 1.0235+0.892 * 1.0979+0.115 * 1.0315
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0596+4.679 * -0.0328-0.327 * 1.2906
=-2.67

* 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 $550 Mil.
Revenue was 1086.305 + 1010.8 + 945.144 + 931.558 = $3,974 Mil.
Gross Profit was 667.614 + 626.878 + 578.493 + 567.52 = $2,441 Mil.
Total Current Assets was $1,713 Mil.
Total Assets was $14,230 Mil.
Property, Plant and Equipment(Net PPE) was $144 Mil.
Depreciation, Depletion and Amortization(DDA) was $267 Mil.
Selling, General & Admin. Expense(SGA) was $1,373 Mil.
Total Current Liabilities was $1,539 Mil.
Long-Term Debt was $5,440 Mil.
Net Income was 158.071 + 182.081 + 167.079 + 158.069 = $665 Mil.
Non Operating Income was -1.047 + -0.355 + -0.534 + -1.334 = $-3 Mil.
Cash Flow from Operations was 378.217 + 270.412 + 316.541 + 169.76 = $1,135 Mil.
Accounts Receivable was $515 Mil.
Revenue was 902.423 + 943.64 + 883.933 + 889.541 = $3,620 Mil.
Gross Profit was 559.519 + 579.091 + 533.483 + 533.911 = $2,206 Mil.
Total Current Assets was $1,432 Mil.
Total Assets was $10,224 Mil.
Property, Plant and Equipment(Net PPE) was $106 Mil.
Depreciation, Depletion and Amortization(DDA) was $215 Mil.
Selling, General & Admin. Expense(SGA) was $1,180 Mil.
Total Current Liabilities was $779 Mil.
Long-Term Debt was $3,105 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)
=(549.838 / 3973.807) / (514.616 / 3619.537)
=0.13836555 / 0.1421773
=0.9732

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)
=(2206.004 / 3619.537) / (2440.505 / 3973.807)
=0.60947132 / 0.61414784
=0.9924

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 - (1712.623 + 144.113) / 14230.054) / (1 - (1432.332 + 106.212) / 10224.408)
=0.8695201 / 0.84952244
=1.0235

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
=3973.807 / 3619.537
=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))
=(215.204 / (215.204 + 106.212)) / (266.577 / (266.577 + 144.113))
=0.66954974 / 0.64909542
=1.0315

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)
=(1372.677 / 3973.807) / (1179.991 / 3619.537)
=0.34543122 / 0.32600606
=1.0596

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)
=((5439.7 + 1538.538) / 14230.054) / ((3105.34 + 779.488) / 10224.408)
=0.49038732 / 0.37995628
=1.2906

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
=(665.3 - -3.27 - 1134.93) / 14230.054
=-0.0328

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.

Roper Technologies Inc has a M-score of -2.67 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.

Roper Technologies Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.96060.81771.13960.90780.92881.12010.91160.8990.94571.2
GMI 1.00490.97821.01240.95230.98630.97020.96040.9820.980.9818
AQI 0.91871.08961.02371.01190.98361.04991.01190.98641.02941.0429
SGI 1.2361.09720.88871.16411.17221.07021.08171.09621.00931.0579
DEPI 0.93470.98210.97310.89450.96470.96470.94550.96420.97091.0469
SGAI 0.9581.03211.03811.0090.95870.9991.05230.96651.02161.0626
LVGI 0.92051.030.84351.00450.83681.24121.03330.88671.1681.2923
TATA -0.0264-0.0393-0.0303-0.035-0.0343-0.027-0.0323-0.0232-0.0287-0.0211
M-score -2.43-2.74-2.53-2.62-2.51-2.51-2.68-2.57-2.72-2.44

Roper Technologies Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.8990.90410.89050.90140.94571.02011.03570.98031.20.9732
GMI 0.9820.98260.98780.98740.980.97650.97670.97790.98180.9924
AQI 0.98641.00881.01311.00971.02941.03851.03381.00811.04291.0235
SGI 1.09621.07371.04331.02651.00931.01081.02131.03851.05791.0979
DEPI 0.96420.97750.98420.96720.97090.95520.93360.94351.04691.0315
SGAI 0.96650.96490.98790.99451.02161.05341.06611.06821.06261.0596
LVGI 0.88671.01851.01131.03021.1681.0281.05621.0071.29231.2906
TATA -0.0185-0.0259-0.0276-0.026-0.0287-0.0238-0.0246-0.0321-0.0211-0.0328
M-score -2.55-2.63-2.68-2.68-2.72-2.58-2.58-2.64-2.44-2.67
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