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Quality Distribution Inc (NAS:QLTY)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

QLTY' s 10-Year Beneish M-Score Range
Min: -7.19   Max: -1.72
Current: -2.95

-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 * 0.8977+0.528 * 1.0456+0.404 * 0.9554+0.892 * 1.0565+0.115 * 1.0171
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.964+4.679 * -0.0971-0.327 * 0.9426
=-2.95

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $131.3 Mil.
Revenue was 230.447 + 243.182 + 258.49 + 255.599 = $987.7 Mil.
Gross Profit was 47.168 + 48.535 + 51.554 + 49.808 = $197.1 Mil.
Total Current Assets was $192.6 Mil.
Total Assets was $417.9 Mil.
Property, Plant and Equipment(Net PPE) was $145.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.4 Mil.
Selling, General & Admin. Expense(SGA) was $148.4 Mil.
Total Current Liabilities was $82.0 Mil.
Long-Term Debt was $329.0 Mil.
Net Income was 2.524 + 2.624 + 3.574 + 11.369 = $20.1 Mil.
Non Operating Income was -0.566 + -0.232 + -0.097 + 4.371 = $3.5 Mil.
Cash Flow from Operations was 24.441 + 9.239 + 22.443 + 1.08 = $57.2 Mil.
Accounts Receivable was $138.5 Mil.
Revenue was 234.487 + 225.421 + 235.671 + 239.296 = $934.9 Mil.
Gross Profit was 45.599 + 43.753 + 49.683 + 55.985 = $195.0 Mil.
Total Current Assets was $188.5 Mil.
Total Assets was $443.2 Mil.
Property, Plant and Equipment(Net PPE) was $166.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.9 Mil.
Selling, General & Admin. Expense(SGA) was $145.7 Mil.
Total Current Liabilities was $82.6 Mil.
Long-Term Debt was $379.9 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)
=(131.308 / 987.718) / (138.453 / 934.875)
=0.13294078 / 0.14809787
=0.8977

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)
=(48.535 / 934.875) / (47.168 / 987.718)
=0.20860543 / 0.19951545
=1.0456

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 - (192.582 + 145.396) / 417.86) / (1 - (188.515 + 165.964) / 443.15)
=0.19116929 / 0.20009252
=0.9554

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
=987.718 / 934.875
=1.0565

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))
=(24.923 / (24.923 + 165.964)) / (21.412 / (21.412 + 145.396))
=0.13056416 / 0.12836315
=1.0171

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)
=(148.415 / 987.718) / (145.722 / 934.875)
=0.1502605 / 0.15587325
=0.964

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)
=((329.033 + 82.027) / 417.86) / ((379.936 + 82.561) / 443.15)
=0.98372661 / 1.0436579
=0.9426

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
=(20.091 - 3.476 - 57.203) / 417.86
=-0.0971

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 -2.95 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.91571.12610.75931.13351.03841.03051.11410.96161.0605
GMI 1.073201.03141.15911.22760.98390.93231.01061.1044
AQI 1.00991.11910.98870.4581.04990.99531.47530.65450.8808
SGI 1.09011.02931.08480.75261.1191.08641.12891.10411.0666
DEPI 1.24040.95851.01590.90321.10811.20371.02990.74941.0952
SGAI 0.74825.19231.23870.78130.81380.96361.20671.02610.9182
LVGI 0.65521.04621.00071.54411.0340.87350.7981.1040.9419
TATA 0.0069-0.0377-0.0531-0.7876-0.0748-0.02840.0588-0.2218-0.0407
M-score -2.22-3.74-2.90-6.55-2.51-2.45-1.79-3.66-2.50

Quality Distribution Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.11411.040.96140.91090.96161.04631.08311.06341.06050.8977
GMI 0.96840.92770.9210.95491.01061.07631.15151.15531.10441.0456
AQI 1.47531.55150.81580.74940.65450.6490.73780.70460.88080.9554
SGI 1.12891.15751.15781.14191.10411.06281.04961.05891.06661.0565
DEPI 1.02990.8550.69380.69130.74940.88251.01161.08951.09521.0171
SGAI 1.1421.2061.11631.02261.02610.95250.91390.89990.91820.964
LVGI 0.7980.88671.02931.03751.1041.10511.01011.00590.94190.9426
TATA 0.05880.0373-0.1042-0.1521-0.2218-0.1951-0.0882-0.0918-0.0407-0.0971
M-score -1.76-1.96-3.04-3.32-3.66-3.44-2.79-2.81-2.50-2.95
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