Royal Bank of Canada (TSX:RY) Beneish M-Score: -2.45 (As of Jun. 25, 2026)


TSX:RY Royal Bank of Canada TSX:RY
77 GF Score
Price C$288.03
GF Value C$204.65
Valuation Significantly Overvalued
! 8 Warning Signs
View Full Analysis

What is Royal Bank of Canada Beneish M-Score?

Royal Bank of Canada TSX:RY -0.13% 77 Beneish M-Score is -2.45 as of Jun. 25, 2026. GuruFocus rates TSX:RY with a GF Score™ of 77/100 and a GF Value™ of C$204.65 (Significantly Overvalued). The stock has 8 warning signs investors should review. Among 1,396 Banks companies, Royal Bank of Canada ranks better than 60.74% on this metric.

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.45 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Royal Bank of Canada's Beneish M-Score or its related term are showing as below:

TSX:RY' s Beneish M-Score Range Over the Past 10 Years
Min: -7.77   Med: -2.48   Max: -1.96
Current: -2.45

During the past 13 years, the highest Beneish M-Score of Royal Bank of Canada was -1.96. The lowest was -7.77. And the median was -2.48.

TSX:RY
77GF Score
Royal Bank of Canada TSX:RY
Beneish M-Score is just one metric. See GF Score™, valuation, warning signs, and more.
View Full Analysis

Royal Bank of Canada 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 Royal Bank of Canada 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+0.528 * 1+0.404 * 1.0002+0.892 * 1.1188+0.115 * 1.0465
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9605+4.679 * -0.02139-0.327 * 0.9565
=-2.45

* 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 (Apr26) TTM:Last Year (Apr25) TTM:
Total Receivables was C$0 Mil.
Revenue was 17429 + 17923 + 17196 + 16960 = C$69,508 Mil.
Gross Profit was 17429 + 17923 + 17196 + 16960 = C$69,508 Mil.
Total Current Assets was C$0 Mil.
Total Assets was C$2,396,080 Mil.
Property, Plant and Equipment(Net PPE) was C$6,778 Mil.
Depreciation, Depletion and Amortization(DDA) was C$2,957 Mil.
Selling, General, & Admin. Expense(SGA) was C$23,957 Mil.
Total Current Liabilities was C$0 Mil.
Long-Term Debt & Capital Lease Obligation was C$361,797 Mil.
Net Income was 5507 + 5784 + 5432 + 5415 = C$22,138 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = C$0 Mil.
Cash Flow from Operations was 21277 + 37898 + -14785 + 29000 = C$73,390 Mil.
 Total Receivables was C$0 Mil.
Revenue was 15656 + 16720 + 15063 + 14688 = C$62,127 Mil.
Gross Profit was 15656 + 16720 + 15063 + 14688 = C$62,127 Mil.
Total Current Assets was C$0 Mil.
Total Assets was C$2,242,133 Mil.
Property, Plant and Equipment(Net PPE) was C$6,734 Mil.
Depreciation, Depletion and Amortization(DDA) was C$3,138 Mil.
Selling, General, & Admin. Expense(SGA) was C$22,294 Mil.
Total Current Liabilities was C$0 Mil.
Long-Term Debt & Capital Lease Obligation was C$353,950 Mil.

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)
=(0 / 69508) / (0 / 62127)
=0 / 0
=1

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)
=(62127 / 62127) / (69508 / 69508)
=1 / 1
=1

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 - (0 + 6778) / 2396080) / (1 - (0 + 6734) / 2242133)
=0.997171 / 0.996997
=1.0002

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
=69508 / 62127
=1.1188

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))
=(3138 / (3138 + 6734)) / (2957 / (2957 + 6778))
=0.317869 / 0.303749
=1.0465

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)
=(23957 / 69508) / (22294 / 62127)
=0.344665 / 0.358846
=0.9605

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)
=((361797 + 0) / 2396080) / ((353950 + 0) / 2242133)
=0.150995 / 0.157863
=0.9565

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
=(22138 - 0 - 73390) / 2396080
=-0.02139

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.

Royal Bank of Canada has a M-score of -2.45 suggests that the company is unlikely to be a manipulator.

Frequently Asked Questions Learn more about Beneish M-Score →
What does a Beneish M-Score of -2.45 mean?
Royal Bank of Canada (TSX:RY) has a Beneish M-Score of -2.45 as of Jun. 25, 2026. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Royal Bank of Canada and its competitors. According to the industry distribution chart, Royal Bank of Canada ranks #548 out of 1396 companies in the Banks industry, placing it in the top 39.3%.
Is Royal Bank of Canada's Beneish M-Score too high?
Royal Bank of Canada's current Beneish M-Score is -2.45. Based on the distribution chart, Royal Bank of Canada ranks #548 out of 1396 companies in the Banks industry, which is above the industry midpoint. Overall, Royal Bank of Canada has a GF Score™ of 77/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Royal Bank of Canada's Beneish M-Score compare to JPM and BAC?
According to the Banks industry distribution chart, Royal Bank of Canada ranks #548 out of 1396 companies for Beneish M-Score. This puts Royal Bank of Canada in the upper half of its industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Beneish M-Score for a Banks company?
A good Beneish M-Score depends on the Banks industry context. However, Beneish M-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Beneish M-Score mean?
A high Beneish M-Score can signal that a stock is expensive relative to its fundamentals. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Royal Bank of Canada and its competitors. Royal Bank of Canada's current Beneish M-Score is -2.45. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Royal Bank of Canada stock overvalued right now?
Based on GuruFocus' analysis, Royal Bank of Canada (TSX:RY) is currently considered Significantly Overvalued. The stock's GF Value™ is C$204.65, compared to a current price of C$288.03 — trading 40.7% above its estimated fair value. The current Beneish M-Score is -2.45. Royal Bank of Canada's overall GF Score™ is 77/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Beneish M-Score calculated?
Beneish M-Score is calculated from a company's financial statements. For Royal Bank of Canada (TSX:RY), the current Beneish M-Score is -2.45 as of Jun. 25, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Is Royal Bank of Canada (TSX:RY) Overvalued in 2026?

Based on GuruFocus' analysis, Royal Bank of Canada stock appears to be overvalued. The current stock price of C$288.03 is trading 40.7% above its estimated GF Value™ of C$204.65. GuruFocus considers Royal Bank of Canada to be Significantly Overvalued.

Key valuation signals for TSX:RY:

  • Beneish M-Score: -2.45
  • GF Value™: C$204.65 vs. price of C$288.03 (40.7% above fair value)
  • GF Score™: 77/100 with 8 warning signs

No single metric tells the full story. See the TSX:RY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.

Royal Bank of Canada Business Description

Address 1 Place Ville Marie, Corporate Secretary\'s Department, Montreal, QC, CAN, H3B 3A9
Royal Bank of Canada is one of the two largest banks in Canada, with around CAD 2.4 trillion in assets at the end of April 2026. It is a diversified financial services company, offering personal and commercial banking, wealth management, insurance, corporate banking, and capital markets services. The bank is concentrated in Canada and has dominant market shares. RBC also has wealth and capital market businesses in the US, UK, and other countries. RBC is a top 15 investment bank globally.
77GF Score

Get the complete analysis for TSX:RY

Beneish M-Score is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.

C$288.03
Price
C$204.65
GF Value