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GuruFocus has detected 5 Warning Signs with Ryder System Inc $R.
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Ryder System Inc (NYSE:R)
Beneish M-Score
-3.00 (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 -3.00 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: -3

-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 -3.03.


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 * 1.0249+0.528 * 0.9983+0.404 * 0.9763+0.892 * 1.0267+0.115 * 0.9535
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9797+4.679 * -0.1202-0.327 * 0.9714
=-3.00

* 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 $1,264 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 + 26.545 = $71 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 + 330.112 + 370.449 = $1,469 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 $1,162 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

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)
=(856.763 / 6730.577) / (814.16 / 6555.466)
=0.12729414 / 0.12419559
=1.0249

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)
=(1469.119 / 6555.466) / (1510.996 / 6730.577)
=0.22410596 / 0.22449725
=0.9983

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 - (1137.559 + 9015.207) / 11108.773) / (1 - (1117.527 + 8748.879) / 10820.186)
=0.08605874 / 0.08814821
=0.9763

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
=6730.577 / 6555.466
=1.0267

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))
=(1162.279 / (1162.279 + 8748.879)) / (1264.306 / (1264.306 + 9015.207))
=0.11726975 / 0.12299279
=0.9535

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)
=0.12664546 / 0.12926739
=0.9797

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)
=0.58461416 / 0.60185657
=0.9714

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
=(290.497 - 70.515 - 1555.196) / 11108.773
=-0.1202

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 -3.00 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97980.91720.82430.95281.03181.19780.85950.98870.98511.0331
GMI 1.01970.71861.20010.98212.35041.01271.03090.97060.9850.9235
AQI 0.83921.09191.03711.13241.17610.91030.96220.93140.91320.9617
SGI 1.09861.04110.91370.81471.0511.1781.03411.02591.03420.9899
DEPI 1.15570.90980.99520.87341.06171.11141.0321.05361.03821.0246
SGAI 1.00781.65660.61211.11980.50710.9990.95751.00920.99911.0442
LVGI 1.04580.94871.02950.92741.04461.08111.01070.9981.03951.0155
TATA -0.084-0.1472-0.1572-0.1664-0.1408-0.1152-0.1218-0.1237-0.1224-0.114
M-score -2.86-3.43-3.28-3.43-2.20-2.72-3.14-3.08-3.09-3.06

Ryder System Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.03460.99580.98510.92841.00110.99791.03311.05061.00731.0249
GMI 0.98270.98330.98530.95980.9310.91980.92320.94510.97910.9983
AQI 0.93240.94510.91320.940.91890.90340.96170.94210.98410.9763
SGI 1.03541.03371.03421.01981.0040.99320.98991.00591.01551.0267
DEPI 1.05121.00631.03821.0161.06341.09051.02461.03140.96240.9535
SGAI 1.01041.00160.99911.02821.05541.06131.04421.01470.99680.9797
LVGI 1.03371.02071.03951.01551.02561.0471.01551.01350.9870.9714
TATA -0.1186-0.1332-0.1224-0.1254-0.1217-0.1158-0.114-0.1195-0.1204-0.1202
M-score -3.01-3.11-3.09-3.17-3.12-3.13-3.06-3.04-3.04-3.00
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