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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 3.34. The lowest was -3.73. And the median was -3.02.
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 * 1.0078||+||0.528 * 1.0532||+||0.404 * 0.9736||+||0.892 * 1.0409||+||0.115 * 0.942|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9504||+||4.679 * -0.119||-||0.327 * 0.9691|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Mar17) TTM:||Last Year (Mar16) TTM:|
|Accounts Receivable was $863 Mil.|
Revenue was 1748.163 + 1729.15 + 1724.418 + 1703.744 = $6,905 Mil.
Gross Profit was 329.471 + 377.194 + 390.82 + 386.835 = $1,484 Mil.
Total Current Assets was $1,113 Mil.
Total Assets was $10,974 Mil.
Property, Plant and Equipment(Net PPE) was $8,925 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,282 Mil.
Selling, General & Admin. Expense(SGA) was $833 Mil.
Total Current Liabilities was $1,978 Mil.
Long-Term Debt was $4,353 Mil.
Net Income was 38.149 + 48.181 + 84.752 + 73.75 = $245 Mil.
Non Operating Income was -1.597 + -35.004 + 5.12 + 17.456 = $-14 Mil.
Cash Flow from Operations was 331.349 + 416.278 + 422.072 + 394.67 = $1,564 Mil.
|Accounts Receivable was $823 Mil.
Revenue was 1629.672 + 1672.743 + 1669.066 + 1662.931 = $6,634 Mil.
Gross Profit was 346.567 + 386.774 + 382.599 + 385.959 = $1,502 Mil.
Total Current Assets was $1,095 Mil.
Total Assets was $11,055 Mil.
Property, Plant and Equipment(Net PPE) was $8,993 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,207 Mil.
Selling, General & Admin. Expense(SGA) was $842 Mil.
Total Current Liabilities was $1,594 Mil.
Long-Term Debt was $4,987 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)|
|=||(862.862 / 6905.475)||/||(822.556 / 6634.412)|
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)|
|=||(1501.899 / 6634.412)||/||(1484.32 / 6905.475)|
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 - (1113.34 + 8925.483) / 10973.807)||/||(1 - (1094.546 + 8992.537) / 11054.53)|
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))|
|=||(1206.551 / (1206.551 + 8992.537))||/||(1281.94 / (1281.94 + 8925.483))|
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)|
|=||(833.245 / 6905.475)||/||(842.295 / 6634.412)|
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)|
|=||((4353.11 + 1977.799) / 10973.807)||/||((4987.217 + 1593.54) / 11054.53)|
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|
|=||(244.832 - -14.025||-||1564.369)||/||10973.807|
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 -2.96 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