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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 3.40. The lowest was -3.75. 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 * 0.9958||+||0.528 * 0.9858||+||0.404 * 0.9451||+||0.892 * 1.0337||+||0.115 * 1.0373|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9977||+||4.679 * -0.1084||-||0.327 * 1.0207|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $821 Mil.|
Revenue was 1687.15 + 1684.571 + 1610.737 + 1617.729 = $6,600 Mil.
Gross Profit was 361.806 + 347.591 + 304.26 + 348.532 = $1,362 Mil.
Total Current Assets was $1,122 Mil.
Total Assets was $9,604 Mil.
Property, Plant and Equipment(Net PPE) was $7,545 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,069 Mil.
Selling, General & Admin. Expense(SGA) was $804 Mil.
Total Current Liabilities was $1,476 Mil.
Long-Term Debt was $4,045 Mil.
Net Income was 83.689 + 75.358 + 48.232 + 64.607 = $272 Mil.
Non Operating Income was 0.996 + -4.828 + 5.382 + 3.952 = $6 Mil.
Cash Flow from Operations was 438.156 + 298.84 + 237.66 + 333.047 = $1,308 Mil.
|Accounts Receivable was $798 Mil.
Revenue was 1634.54 + 1603.999 + 1563.017 + 1583.536 = $6,385 Mil.
Gross Profit was 345.681 + 332.4 + 296.058 + 324.914 = $1,299 Mil.
Total Current Assets was $1,099 Mil.
Total Assets was $8,808 Mil.
Property, Plant and Equipment(Net PPE) was $6,799 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,004 Mil.
Selling, General & Admin. Expense(SGA) was $780 Mil.
Total Current Liabilities was $1,274 Mil.
Long-Term Debt was $3,686 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)|
|=||(821.446 / 6600.187)||/||(798.066 / 6385.092)|
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)|
|=||(347.591 / 6385.092)||/||(361.806 / 6600.187)|
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 - (1122.362 + 7544.881) / 9604.362)||/||(1 - (1099.491 + 6799.007) / 8807.802)|
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))|
|=||(1004.216 / (1004.216 + 6799.007))||/||(1068.576 / (1068.576 + 7544.881))|
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)|
|=||(803.941 / 6600.187)||/||(779.55 / 6385.092)|
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)|
|=||((4045.245 + 1475.573) / 9604.362)||/||((3686.038 + 1274.267) / 8807.802)|
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|
|=||(271.886 - 5.502||-||1307.703)||/||9604.362|
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