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Quality Distribution Inc (NAS:QLTY)
Beneish M-Score
-2.81 (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.

Quality Distribution Inc has a M-score of -2.81 suggests that the company is not a manipulator.

QLTY' s 10-Year Beneish M-Score Range
Min: -7.19   Max: -1.72
Current: -2.81

-7.19
-1.72

During the past 13 years, the highest Beneish M-Score of Quality Distribution Inc was -1.72. The lowest was -7.19. And the median was -2.77.


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 Quality Distribution 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 * 1.0634+0.528 * 1.1553+0.404 * 0.7046+0.892 * 1.0589+0.115 * 1.0895
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8999+4.679 * -0.0918-0.327 * 1.0059
=-2.81

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $146.5 Mil.
Revenue was 258.49 + 255.599 + 234.487 + 225.421 = $974.0 Mil.
Gross Profit was 51.554 + 49.808 + 45.599 + 43.753 = $190.7 Mil.
Total Current Assets was $201.1 Mil.
Total Assets was $439.6 Mil.
Property, Plant and Equipment(Net PPE) was $160.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.6 Mil.
Selling, General & Admin. Expense(SGA) was $144.3 Mil.
Total Current Liabilities was $95.9 Mil.
Long-Term Debt was $347.0 Mil.
Net Income was 3.574 + 11.369 + 3.073 + -22.798 = $-4.8 Mil.
Non Operating Income was -0.097 + 4.371 + -0.157 + -0.089 = $4.0 Mil.
Cash Flow from Operations was 22.443 + 1.08 + 1.408 + 6.619 = $31.6 Mil.
Accounts Receivable was $130.1 Mil.
Revenue was 235.671 + 239.296 + 229.422 + 215.392 = $919.8 Mil.
Gross Profit was 49.683 + 55.985 + 52.997 + 49.397 = $208.1 Mil.
Total Current Assets was $177.9 Mil.
Total Assets was $465.1 Mil.
Property, Plant and Equipment(Net PPE) was $170.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.4 Mil.
Selling, General & Admin. Expense(SGA) was $151.4 Mil.
Total Current Liabilities was $85.6 Mil.
Long-Term Debt was $380.2 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)
=(146.501 / 973.997) / (130.099 / 919.781)
=0.15041217 / 0.14144563
=1.0634

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)
=(49.808 / 919.781) / (51.554 / 973.997)
=0.2262082 / 0.19580553
=1.1553

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 - (201.116 + 160.539) / 439.633) / (1 - (177.897 + 170.083) / 465.052)
=0.17737067 / 0.25173959
=0.7046

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
=973.997 / 919.781
=1.0589

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))
=(26.378 / (26.378 + 170.083)) / (22.566 / (22.566 + 160.539))
=0.13426583 / 0.12324076
=1.0895

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)
=(144.31 / 973.997) / (151.441 / 919.781)
=0.14816267 / 0.16464898
=0.8999

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)
=((347.039 + 95.893) / 439.633) / ((380.195 + 85.582) / 465.052)
=1.00750399 / 1.00155897
=1.0059

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
=(-4.782 - 4.028 - 31.55) / 439.633
=-0.0918

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.

Quality Distribution Inc has a M-score of -2.81 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 own currency.

Quality Distribution Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.17430.91571.12610.75931.13351.03841.03051.11410.9616
GMI 1.07691.073201.03141.15911.22760.98390.93231.0106
AQI 0.99351.00991.11910.98870.4581.04990.99531.47530.6545
SGI 1.10011.09011.02931.08480.75261.1191.08641.12891.1041
DEPI 1.05861.24040.95851.01590.90321.10811.20371.02990.7494
SGAI 1.8150.74825.19231.23870.78130.81380.96361.20671.0261
LVGI 1.22690.65521.04621.00071.54411.0340.87350.7981.104
TATA -0.06810.0069-0.0377-0.0531-0.7876-0.0748-0.02840.0588-0.2218
M-score -2.72-2.22-3.74-2.90-6.55-2.51-2.45-1.79-3.66

Quality Distribution Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.11871.04791.11411.040.96140.91090.96161.04631.08311.0634
GMI 0.99920.97080.96840.92770.9210.95491.01061.07631.15151.1553
AQI 1.5731.7471.47531.55150.81580.74940.65450.6490.73780.7046
SGI 1.09371.09891.12891.15751.15781.14191.10411.06281.04961.0589
DEPI 1.30041.15281.02990.8550.69380.69130.74940.88251.01161.0895
SGAI 1.05281.16621.1421.2061.11631.02261.02610.95250.91390.8999
LVGI 0.78060.7950.7980.88671.02931.03751.1041.10511.01011.0059
TATA 0.04890.060.05880.0373-0.1042-0.1521-0.2218-0.1951-0.0882-0.0918
M-score -1.73-1.72-1.76-1.96-3.04-3.32-3.66-3.44-2.79-2.81
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