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Quality Distribution Inc (NAS:QLTY)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

QLTY' s 10-Year Beneish M-Score Range
Min: -7.19   Max: -1.72
Current: -2.79

-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 -2.75.


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 * 1.0831+0.528 * 1.1515+0.404 * 0.7378+0.892 * 1.0496+0.115 * 1.0116
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9139+4.679 * -0.0882-0.327 * 1.0101
=-2.79

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $147.4 Mil.
Revenue was 255.599 + 234.487 + 225.421 + 235.671 = $951.2 Mil.
Gross Profit was 49.808 + 45.599 + 43.753 + 49.683 = $188.8 Mil.
Total Current Assets was $197.7 Mil.
Total Assets was $445.6 Mil.
Property, Plant and Equipment(Net PPE) was $162.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.6 Mil.
Selling, General & Admin. Expense(SGA) was $143.1 Mil.
Total Current Liabilities was $82.1 Mil.
Long-Term Debt was $370.7 Mil.
Net Income was 11.369 + 3.073 + -22.798 + 2.763 = $-5.6 Mil.
Non Operating Income was 4.371 + -0.157 + -0.089 + -0.419 = $3.7 Mil.
Cash Flow from Operations was 1.08 + 1.408 + 6.619 + 20.903 = $30.0 Mil.
Accounts Receivable was $129.7 Mil.
Revenue was 239.296 + 229.422 + 215.392 + 222.078 = $906.2 Mil.
Gross Profit was 55.985 + 52.997 + 49.397 + 48.796 = $207.2 Mil.
Total Current Assets was $173.8 Mil.
Total Assets was $474.4 Mil.
Property, Plant and Equipment(Net PPE) was $177.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $149.2 Mil.
Total Current Liabilities was $74.8 Mil.
Long-Term Debt was $402.5 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)
=(147.394 / 951.178) / (129.65 / 906.188)
=0.15495943 / 0.14307186
=1.0831

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)
=(45.599 / 906.188) / (49.808 / 951.178)
=0.22862254 / 0.19853592
=1.1515

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 - (197.735 + 162.428) / 445.645) / (1 - (173.759 + 177.296) / 474.396)
=0.19181636 / 0.25999587
=0.7378

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
=951.178 / 906.188
=1.0496

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))
=(26.099 / (26.099 + 177.296)) / (23.597 / (23.597 + 162.428))
=0.12831682 / 0.12684854
=1.0116

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)
=(143.141 / 951.178) / (149.226 / 906.188)
=0.15048813 / 0.16467444
=0.9139

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)
=((370.717 + 82.141) / 445.645) / ((402.487 + 74.79) / 474.396)
=1.01618553 / 1.00607299
=1.0101

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
=(-5.593 - 3.706 - 30.01) / 445.645
=-0.0882

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 -2.79 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.03811.11871.04791.11411.040.96140.91090.96161.04631.0831
GMI 1.00230.99920.97080.96840.92770.9210.95491.01061.07631.1515
AQI 0.97081.5731.7471.47531.55150.81580.74940.65450.6490.7378
SGI 1.08071.09371.09891.12891.15751.15781.14191.10411.06281.0496
DEPI 1.22521.30041.15281.02990.8550.69380.69130.74940.88251.0116
SGAI 0.96091.05281.16621.1421.2061.11631.02261.02610.95250.9139
LVGI 0.82730.78060.7950.7980.88671.02931.03751.1041.10511.0101
TATA -0.0080.04890.060.05880.0373-0.1042-0.1521-0.2218-0.1951-0.0882
M-score -2.33-1.73-1.72-1.76-1.96-3.04-3.32-3.66-3.44-2.79
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