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Quality Distribution, Inc. (NAS:QLTY)
Beneish M-Score
-3.66 (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 -3.66 suggests that the company is not a manipulator.

QLTY' s 10-Year Beneish M-Score Range
Min: -6.54   Max: -1.76
Current: -3.66

-6.54
-1.76

During the past 13 years, the highest Beneish M-Score of Quality Distribution, Inc. was -1.76. The lowest was -6.54. And the median was -2.51.


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 * 0.9616+0.528 * 1.0106+0.404 * 0.6545+0.892 * 1.1041+0.115 * 0.7494
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0261+4.679 * -0.2218-0.327 * 1.104
=-3.66

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $120.9 Mil.
Revenue was 225.421 + 235.671 + 239.296 + 229.422 = $929.8 Mil.
Gross Profit was 43.753 + 49.683 + 55.985 + 52.997 = $202.4 Mil.
Total Current Assets was $166.9 Mil.
Total Assets was $427.2 Mil.
Property, Plant and Equipment(Net PPE) was $170.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $149.4 Mil.
Total Current Liabilities was $78.2 Mil.
Long-Term Debt was $372.7 Mil.
Net Income was -22.798 + 2.763 + -31.147 + 9.144 = $-42.0 Mil.
Non Operating Income was -0.089 + -0.419 + 0.271 + 6.972 = $6.7 Mil.
Cash Flow from Operations was 6.619 + 20.903 + 9.829 + 8.619 = $46.0 Mil.
Accounts Receivable was $113.9 Mil.
Revenue was 215.392 + 222.078 + 212.733 + 191.915 = $842.1 Mil.
Gross Profit was 49.397 + 48.796 + 46.309 + 40.768 = $185.3 Mil.
Total Current Assets was $157.6 Mil.
Total Assets was $513.6 Mil.
Property, Plant and Equipment(Net PPE) was $190.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.1 Mil.
Selling, General & Admin. Expense(SGA) was $131.9 Mil.
Total Current Liabilities was $80.0 Mil.
Long-Term Debt was $411.0 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)
=(120.932 / 929.81) / (113.906 / 842.118)
=0.13006098 / 0.13526133
=0.9616

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)
=(49.683 / 842.118) / (43.753 / 929.81)
=0.2200048 / 0.21769824
=1.0106

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 - (166.918 + 170.114) / 427.249) / (1 - (157.564 + 190.342) / 513.603)
=0.2111579 / 0.32261689
=0.6545

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
=929.81 / 842.118
=1.1041

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))
=(21.09 / (21.09 + 190.342)) / (26.121 / (26.121 + 170.114))
=0.09974838 / 0.13311081
=0.7494

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)
=(149.384 / 929.81) / (131.855 / 842.118)
=0.16066078 / 0.15657544
=1.0261

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)
=((372.725 + 78.156) / 427.249) / ((410.975 + 79.994) / 513.603)
=1.05531201 / 0.95593094
=1.104

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
=(-42.038 - 6.735 - 45.97) / 427.249
=-0.2218

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 -3.66 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 1.07691.073200.92071.15911.22760.98390.93231.0106
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 1.8150.74826.15741.04460.78130.81380.96361.20671.0261
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 -2.72-2.22-3.90-2.93-6.55-2.51-2.45-1.79-3.66

Quality Distribution, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.12561.03051.03811.11871.04791.11411.040.96140.91090.9616
GMI 0.83870.94721.00230.99920.97080.96840.92770.9210.95491.0106
AQI 0.93990.99530.97081.5731.7471.47531.55150.81580.74940.6545
SGI 1.09051.08641.08071.09371.09891.12891.15751.15781.14191.1041
DEPI 1.15831.20371.22521.30041.15281.02990.8550.69380.69130.7494
SGAI 1.53731.01830.96091.05281.16621.1421.2061.11631.02261.0261
LVGI 0.92370.87350.82730.78060.7950.7980.88671.02931.03751.104
TATA -0.0535-0.0284-0.0080.04890.060.05880.0373-0.1042-0.1521-0.2218
M-score -2.69-2.48-2.33-1.73-1.72-1.76-1.96-3.04-3.32-3.66
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