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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.
Ryder System Inc has a M-score of -2.96 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Ryder System Inc was 3.40. The lowest was -3.75. And the median was -3.03.
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 * 1.0313||+||0.528 * 0.9779||+||0.404 * 0.9355||+||0.892 * 1.0292||+||0.115 * 1.0879|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0122||+||4.679 * -0.1062||-||0.327 * 1.0174|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $822 Mil.|
Revenue was 1610.737 + 1617.729 + 1634.54 + 1603.999 = $6,467 Mil.
Gross Profit was 304.26 + 344.802 + 347.078 + 333.624 = $1,330 Mil.
Total Current Assets was $1,117 Mil.
Total Assets was $9,367 Mil.
Property, Plant and Equipment(Net PPE) was $7,325 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,031 Mil.
Selling, General & Admin. Expense(SGA) was $793 Mil.
Total Current Liabilities was $1,373 Mil.
Long-Term Debt was $4,046 Mil.
Net Income was 48.232 + 64.607 + 71.067 + 62.194 = $246 Mil.
Non Operating Income was 5.382 + 27.732 + -3.745 + 0 = $29 Mil.
Cash Flow from Operations was 237.66 + 337.41 + 321.895 + 314.849 = $1,212 Mil.
|Accounts Receivable was $774 Mil.
Revenue was 1563.017 + 1583.536 + 1573.295 + 1563.86 = $6,284 Mil.
Gross Profit was 296.058 + 324.914 + 326.871 + 315.642 = $1,263 Mil.
Total Current Assets was $1,071 Mil.
Total Assets was $8,392 Mil.
Property, Plant and Equipment(Net PPE) was $6,435 Mil.
Depreciation, Depletion and Amortization(DDA) was $998 Mil.
Selling, General & Admin. Expense(SGA) was $761 Mil.
Total Current Liabilities was $1,179 Mil.
Long-Term Debt was $3,592 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)|
|=||(822.01 / 6467.005)||/||(774.441 / 6283.708)|
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)|
|=||(344.802 / 6283.708)||/||(304.26 / 6467.005)|
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 - (1117.116 + 7324.608) / 9367.483)||/||(1 - (1070.855 + 6434.71) / 8392.102)|
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))|
|=||(998.15 / (998.15 + 6434.71))||/||(1031.469 / (1031.469 + 7324.608))|
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)|
|=||(792.57 / 6467.005)||/||(760.795 / 6283.708)|
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)|
|=||((4045.751 + 1372.622) / 9367.483)||/||((3592.127 + 1178.87) / 8392.102)|
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|
|=||(246.1 - 29.369||-||1211.814)||/||9367.483|
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