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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.
During the past 13 years, the highest Beneish M-Score of Ryder System Inc was 6.10. The lowest was -3.97. And the median was -3.01.
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 Ryder System 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 * 1.0249||+||0.528 * 0.9972||+||0.404 * 0.9763||+||0.892 * 1.0267||+||0.115 * 0.9628|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9797||+||4.679 * -0.1193||-||0.327 * 0.9714|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $857 Mil.|
Revenue was 1724.418 + 1703.744 + 1629.672 + 1672.743 = $6,731 Mil.
Gross Profit was 390.82 + 386.835 + 346.567 + 386.774 = $1,511 Mil.
Total Current Assets was $1,138 Mil.
Total Assets was $11,109 Mil.
Property, Plant and Equipment(Net PPE) was $9,015 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,254 Mil.
Selling, General & Admin. Expense(SGA) was $852 Mil.
Total Current Liabilities was $2,030 Mil.
Long-Term Debt was $4,464 Mil.
Net Income was 84.752 + 73.75 + 55.794 + 76.201 = $290 Mil.
Non Operating Income was 5.12 + 17.456 + 21.394 + 16.593 = $61 Mil.
Cash Flow from Operations was 422.072 + 397.663 + 365.009 + 370.452 = $1,555 Mil.
|Accounts Receivable was $814 Mil.
Revenue was 1669.066 + 1662.931 + 1567.153 + 1656.316 = $6,555 Mil.
Gross Profit was 382.599 + 385.959 + 329.36 + 369.695 = $1,468 Mil.
Total Current Assets was $1,118 Mil.
Total Assets was $10,820 Mil.
Property, Plant and Equipment(Net PPE) was $8,749 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,166 Mil.
Selling, General & Admin. Expense(SGA) was $847 Mil.
Total Current Liabilities was $1,367 Mil.
Long-Term Debt was $5,145 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(856.763 / 6730.577)||/||(814.16 / 6555.466)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1467.613 / 6555.466)||/||(1510.996 / 6730.577)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1137.559 + 9015.207) / 11108.773)||/||(1 - (1117.527 + 8748.879) / 10820.186)|
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.
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))|
|=||(1165.977 / (1165.977 + 8748.879))||/||(1254.354 / (1254.354 + 9015.207))|
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)|
|=||(852.397 / 6730.577)||/||(847.408 / 6555.466)|
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)|
|=||((4464.495 + 2029.851) / 11108.773)||/||((5144.938 + 1367.262) / 10820.186)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(290.497 - 60.563||-||1555.196)||/||11108.773|
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.
Ryder System Inc has a M-score of -2.99 suggests that the company will not be a manipulator.
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
Ryder System Inc Annual Data
Ryder System Inc Quarterly Data