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GuruFocus has detected 1 Warning Sign with Ryder System Inc $R.
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Ryder System Inc (NYSE:R)
Beneish M-Score
-2.96 (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.

Ryder System Inc has a M-score of -2.96 suggests that the company is not a manipulator.

R' s Beneish M-Score Range Over the Past 10 Years
Min: -3.73   Max: 3.34
Current: -2.96

-3.73
3.34

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.


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 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
=-2.96

* 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

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)
=(862.862 / 6905.475) / (822.556 / 6634.412)
=0.12495332 / 0.12398326
=1.0078

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)
=(1501.899 / 6634.412) / (1484.32 / 6905.475)
=0.22638012 / 0.21494828
=1.0532

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 - (1113.34 + 8925.483) / 10973.807) / (1 - (1094.546 + 8992.537) / 11054.53)
=0.08520143 / 0.08751589
=0.9736

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
=6905.475 / 6634.412
=1.0409

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))
=0.11829989 / 0.125589
=0.942

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)
=0.1206644 / 0.1269585
=0.9504

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)
=0.57691091 / 0.59529957
=0.9691

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
=(244.832 - -14.025 - 1564.369) / 10973.807
=-0.119

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.


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 local exchange's currency.

Ryder System Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.91720.82430.95281.03181.19780.85950.98870.98511.03311.0105
GMI 0.71861.20010.98212.35041.01271.03090.97060.9850.92351.0217
AQI 1.09191.03711.13241.17610.91030.96220.93140.91320.94790.9549
SGI 1.04110.91370.81471.0511.1781.03411.02591.03420.98991.0327
DEPI 0.90980.99520.87341.06171.11141.0321.05361.04711.02930.9555
SGAI 1.65660.61211.11980.50710.9990.95751.00920.99911.04420.9662
LVGI 0.94871.02950.92741.04461.08111.01070.9981.03951.01460.9732
TATA -0.1472-0.1572-0.1664-0.1408-0.1152-0.1218-0.1237-0.1213-0.1126-0.1236
M-score -3.43-3.28-3.43-2.20-2.72-3.14-3.08-3.08-3.06-3.02

Ryder System Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.98510.92841.00110.99791.03311.05061.00731.02491.01051.0078
GMI 0.98530.95980.9310.91980.92320.94510.97910.99831.02171.0532
AQI 0.91320.940.91890.90340.94790.94210.98410.97630.95490.9736
SGI 1.03421.01981.0040.99320.98991.00591.01551.02671.03271.0409
DEPI 1.04711.02461.07231.09951.02931.04120.96650.95760.95550.942
SGAI 0.99911.02821.05541.06131.04421.00650.98890.97190.95840.9504
LVGI 1.03951.01551.02561.0471.01461.01350.9870.97140.97320.9691
TATA -0.1213-0.1243-0.1206-0.1148-0.1126-0.1175-0.1182-0.118-0.123-0.119
M-score -3.08-3.16-3.12-3.12-3.06-3.03-3.03-2.99-3.01-2.96
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