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Roku (ROKU) Beneish M-Score : -2.88 (As of Oct. 31, 2024)


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What is Roku Beneish M-Score?

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 -2.88 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ROKU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.98   Med: -2.36   Max: 1.36
Current: -2.88

During the past 9 years, the highest Beneish M-Score of Roku was 1.36. The lowest was -3.98. And the median was -2.36.


Roku Beneish M-Score Historical Data

The historical data trend for Roku'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.

* Premium members only.

Roku Beneish M-Score Chart

Roku Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only 0.60 -2.46 -1.65 -3.11 -3.67

Roku Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.98 -3.67 -3.84 -3.57 -2.88

Competitive Comparison of Roku's Beneish M-Score

For the Entertainment subindustry, Roku'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.


Roku's Beneish M-Score Distribution in the Media - Diversified Industry

For the Media - Diversified industry and Communication Services sector, Roku's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Roku's Beneish M-Score falls into.



Roku 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 Roku 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 * 0.8756+0.528 * 0.9687+0.404 * 1.0641+0.892 * 1.1571+0.115 * 0.8859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7608+4.679 * -0.102207-0.327 * 0.9567
=-2.88

* 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 (Sep24) TTM:Last Year (Sep23) TTM:
Total Receivables was $730 Mil.
Revenue was 1062.203 + 968.179 + 881.469 + 984.425 = $3,896 Mil.
Gross Profit was 480.075 + 424.7 + 388.291 + 437.924 = $1,731 Mil.
Total Current Assets was $3,186 Mil.
Total Assets was $4,303 Mil.
Property, Plant and Equipment(Net PPE) was $537 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General, & Admin. Expense(SGA) was $1,296 Mil.
Total Current Liabilities was $1,241 Mil.
Long-Term Debt & Capital Lease Obligation was $535 Mil.
Net Income was -9.03 + -33.953 + -50.855 + -78.291 = $-172 Mil.
Non Operating Income was 30.88 + 28.129 + 25.956 + 27.665 = $113 Mil.
Cash Flow from Operations was 68.664 + 23.406 + 46.683 + 16.327 = $155 Mil.
Total Receivables was $720 Mil.
Revenue was 912.018 + 847.186 + 740.99 + 867.056 = $3,367 Mil.
Gross Profit was 368.823 + 378.271 + 337.597 + 364.379 = $1,449 Mil.
Total Current Assets was $2,971 Mil.
Total Assets was $4,191 Mil.
Property, Plant and Equipment(Net PPE) was $689 Mil.
Depreciation, Depletion and Amortization(DDA) was $126 Mil.
Selling, General, & Admin. Expense(SGA) was $1,472 Mil.
Total Current Liabilities was $1,208 Mil.
Long-Term Debt & Capital Lease Obligation was $600 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)
=(729.911 / 3896.276) / (720.398 / 3367.25)
=0.187336 / 0.213943
=0.8756

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)
=(1449.07 / 3367.25) / (1730.99 / 3896.276)
=0.430342 / 0.444268
=0.9687

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 - (3186.43 + 537.325) / 4303.416) / (1 - (2971.001 + 689.308) / 4190.779)
=0.134698 / 0.12658
=1.0641

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
=3896.276 / 3367.25
=1.1571

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))
=(125.573 / (125.573 + 689.308)) / (113.145 / (113.145 + 537.325))
=0.1541 / 0.173943
=0.8859

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)
=(1295.661 / 3896.276) / (1471.832 / 3367.25)
=0.332538 / 0.437102
=0.7608

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)
=((535.378 + 1240.608) / 4303.416) / ((600.047 + 1207.744) / 4190.779)
=0.412692 / 0.431373
=0.9567

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
=(-172.129 - 112.63 - 155.08) / 4303.416
=-0.102207

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.

Roku has a M-score of -2.88 suggests that the company is unlikely to be a manipulator.


Roku Business Description

Address
1155 Coleman Avenue, San Jose, CA, USA, 95110
Roku enables consumers to stream television programming. It has more than 80 million streaming households and provided well over 100 billion streaming hours in 2023. Roku is the top streaming operating system in the US, reaching more than half of broadband households, according to the company. Roku's OS is built into streaming devices and televisions that Roku sells and on connected televisions from other manufacturers that license Roku's name and software. Roku also operates the Roku Channel, a free, ad-supported streaming television platform that offers a mix of on-demand and live television programming. Roku generates revenue primarily from selling devices, licensing, and advertising, and it receives fees from subscription streaming platforms that sell subscriptions through Roku.
Executives
Dan Jedda officer: CFO C/O STITCH FIX, INC., 1 MONTGOMERY STREET, SUITE 1500, SAN FRANCISCO CA 94104
Charles Collier officer: President, Roku Media 1155 COLEMAN AVE, SAN JOSE CA 95110
Anthony J. Wood director, 10 percent owner, officer: CEO and Chairman BOD C/O ROKU, INC., 150 WINCHESTER CIRCLE, LOS GATOS CA 95032
Matthew C. Banks officer: VP, Corp Controller & CAO 1155 COLEMAN AVE, SAN JOSE CA 95110
Gilbert Fuchsberg officer: SVP, Corporate Development 1155 COLEMAN AVE, SAN JOSE CA 95110
Stephen H Kay officer: SVP General Counsel, Secretary 6922 HOLLYWOOD BLVD., 12TH FLOOR, LOS ANGELES CA 90028
Mai Fyfield director C/O ROKU, INC., 150 WINCHESTER CIRCLE, LOS GATOS CA 95032
Jeffrey M Blackburn director PO BOX 81226, SEATTLE WA 98108-1226
Mustafa Ozgen officer: President, Devices 150 WINCHESTER CIRCLE, LOS GATOS CA 95032
Gidon Katz officer: President, Consumer Experience 1155 COLEMAN AVE, SAN JOSE CA 95110
Ray A. Rothrock director 3340 HILLVIEW AVENUE, PALO ALTO CA 94304
Ravi Ahuja director C/O TWENTY-FIRST CENTURY FOX, INC., 1211 AVENUE OF THE AMERICAS, NEW YORK NY 10036
Gina Luna director 24955 INTERSTATE 45 N, THE WOODLANDS TX 77380
Laurie Simon Hodrick director C/O 655 BROAD STREET, NEWARK NJ 07102
Jeff Hastings director AVID TECHNOLOGY, INC., ONE PARK WEST, TEWKSBURY MA 01876