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GuruFocus has detected 5 Warning Signs with C.H. Robinson Worldwide Inc $CHRW.
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C.H. Robinson Worldwide Inc (NAS:CHRW)
Beneish M-Score
-2.40 (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.

C.H. Robinson Worldwide Inc has a M-score of -2.40 suggests that the company is not a manipulator.

CHRW' s Beneish M-Score Range Over the Past 10 Years
Min: -2.75   Max: 0.58
Current: -2.4

-2.75
0.58

During the past 13 years, the highest Beneish M-Score of C.H. Robinson Worldwide Inc was 0.58. The lowest was -2.75. And the median was -2.40.


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 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 * 1.1652+0.528 * 0.9715+0.404 * 0.9893+0.892 * 0.9754+0.115 * 1.0634
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0469+4.679 * -0.0043-0.327 * 1.0395
=-2.40

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,711 Mil.
Revenue was 3414.975 + 3355.754 + 3299.741 + 3073.943 = $13,144 Mil.
Gross Profit was 561.516 + 558.462 + 594.215 + 563.335 = $2,278 Mil.
Total Current Assets was $2,008 Mil.
Total Assets was $3,688 Mil.
Property, Plant and Equipment(Net PPE) was $233 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $1,440 Mil.
Total Current Liabilities was $1,846 Mil.
Long-Term Debt was $500 Mil.
Net Income was 122.303 + 129.028 + 143.09 + 118.963 = $513 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 152.58 + 129.567 + 143.111 + 104.15 = $529 Mil.
Accounts Receivable was $1,506 Mil.
Revenue was 3210.853 + 3419.253 + 3545.088 + 3300.89 = $13,476 Mil.
Gross Profit was 570.777 + 588.575 + 584.018 + 525.11 = $2,268 Mil.
Total Current Assets was $1,731 Mil.
Total Assets was $3,184 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $66 Mil.
Selling, General & Admin. Expense(SGA) was $1,410 Mil.
Total Current Liabilities was $1,449 Mil.
Long-Term Debt was $500 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)
=(1711.191 / 13144.413) / (1505.62 / 13476.084)
=0.1301839 / 0.11172534
=1.1652

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)
=(2268.48 / 13476.084) / (2277.528 / 13144.413)
=0.16833377 / 0.17326966
=0.9715

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 - (2008.102 + 232.953) / 3687.758) / (1 - (1730.698 + 190.874) / 3184.358)
=0.39229879 / 0.39655906
=0.9893

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
=13144.413 / 13476.084
=0.9754

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))
=(66.409 / (66.409 + 190.874)) / (74.669 / (74.669 + 232.953))
=0.25811655 / 0.24272971
=1.0634

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)
=(1439.997 / 13144.413) / (1410.17 / 13476.084)
=0.10955202 / 0.10464242
=1.0469

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 + 1845.718) / 3687.758) / ((500 + 1448.597) / 3184.358)
=0.63608241 / 0.61192774
=1.0395

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
=(513.384 - 0 - 529.408) / 3687.758
=-0.0043

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 -2.40 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.

C.H. Robinson Worldwide Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.06810.77531.20960.95591.03021.08020.91441.02640.95761.1652
GMI 0.97131.06070.87881.15231.00211.04461.05020.9660.88540.9715
AQI 0.98381.13231.11380.89740.93361.87350.9960.8531.33280.9893
SGI 1.11591.17250.88331.2241.11451.09891.12261.05631.00040.9754
DEPI 1.06450.92051.11921.00741.0021.00640.77530.96061.05441.0634
SGAI 0.98970.93331.12340.86620.99791.0090.98581.03351.11941.0469
LVGI 0.99350.91861.03840.96911.06051.07171.43711.02270.94751.0395
TATA 0.0011-0.0524-0.00760.0205-00.04760.0243-0.0198-0.0655-0.0043
M-score -2.32-2.66-2.46-2.15-2.39-1.74-2.48-2.59-2.75-2.40

C.H. Robinson Worldwide Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.99341.02640.96970.96310.98040.95760.91140.98731.07241.1652
GMI 0.99360.9660.93530.91930.91050.88540.87470.8780.91370.9715
AQI 0.96060.8531.16851.16991.17111.33281.03781.00781.04970.9893
SGI 1.05531.05631.05641.04241.02691.00040.97220.95120.94990.9754
DEPI 0.95190.96061.10681.11011.08741.05440.92160.98031.05911.0634
SGAI 0.99541.03351.05651.07091.07921.11941.13071.13031.0991.0469
LVGI 0.99541.02271.02321.01411.01040.94750.91070.92220.9991.0395
TATA -0.0138-0.0198-0.0412-0.0454-0.0533-0.0655-0.0632-0.0556-0.0309-0.0043
M-score -2.52-2.59-2.62-2.67-2.71-2.75-2.94-2.86-2.64-2.40
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