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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.
During the past 13 years, the highest Beneish M-Score of C.H. Robinson Worldwide Inc was 0.58. The lowest was -3.06. And the median was -2.42.
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 C.H. Robinson Worldwide 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 * 1.0724||+||0.528 * 0.9137||+||0.404 * 1.0497||+||0.892 * 0.9499||+||0.115 * 1.0591|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.099||+||4.679 * -0.0309||-||0.327 * 0.999|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $1,683 Mil.|
Revenue was 3355.754 + 3299.741 + 3073.943 + 3210.853 = $12,940 Mil.
Gross Profit was 558.462 + 594.215 + 563.335 + 570.777 = $2,287 Mil.
Total Current Assets was $1,968 Mil.
Total Assets was $3,664 Mil.
Property, Plant and Equipment(Net PPE) was $226 Mil.
Depreciation, Depletion and Amortization(DDA) was $70 Mil.
Selling, General & Admin. Expense(SGA) was $1,428 Mil.
Total Current Liabilities was $1,800 Mil.
Long-Term Debt was $500 Mil.
Net Income was 129.028 + 143.09 + 118.963 + 126.583 = $518 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 129.567 + 143.111 + 104.15 + 253.893 = $631 Mil.
|Accounts Receivable was $1,652 Mil.
Revenue was 3419.253 + 3545.088 + 3300.89 + 3357.202 = $13,622 Mil.
Gross Profit was 588.575 + 584.018 + 525.11 + 501.816 = $2,200 Mil.
Total Current Assets was $1,856 Mil.
Total Assets was $3,313 Mil.
Property, Plant and Equipment(Net PPE) was $190 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $1,368 Mil.
Total Current Liabilities was $1,581 Mil.
Long-Term Debt was $500 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1682.686 / 12940.291)||/||(1651.794 / 13622.433)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2199.519 / 13622.433)||/||(2286.789 / 12940.291)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1967.549 + 226.47) / 3664.062)||/||(1 - (1856.211 + 190.244) / 3312.565)|
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.
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))|
|=||(63.08 / (63.08 + 190.244))||/||(69.612 / (69.612 + 226.47))|
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)|
|=||(1428.244 / 12940.291)||/||(1368.06 / 13622.433)|
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)|
|=||((500 + 1799.797) / 3664.062)||/||((500 + 1581.259) / 3312.565)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(517.664 - 0||-||630.721)||/||3664.062|
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.
C.H. Robinson Worldwide Inc has a M-score of -2.64 suggests that the company will not be a manipulator.
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
C.H. Robinson Worldwide Inc Annual Data
C.H. Robinson Worldwide Inc Quarterly Data