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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 -2.16. The lowest was -3.64. And the median was -3.05.
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 * 0.9851||+||0.528 * 0.9841||+||0.404 * 0.9297||+||0.892 * 1.0342||+||0.115 * 1.0056|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9991||+||4.679 * -0.1211||-||0.327 * 1.0198|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $693 Mil.|
Revenue was 1656.316 + 1687.15 + 1684.571 + 1610.737 = $6,639 Mil.
Gross Profit was 369.695 + 361.806 + 347.591 + 304.26 = $1,383 Mil.
Total Current Assets was $1,076 Mil.
Total Assets was $9,676 Mil.
Property, Plant and Equipment(Net PPE) was $7,694 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,088 Mil.
Selling, General & Admin. Expense(SGA) was $817 Mil.
Total Current Liabilities was $1,094 Mil.
Long-Term Debt was $4,500 Mil.
Net Income was 11.296 + 83.689 + 75.358 + 48.232 = $219 Mil.
Non Operating Income was 18.387 + 0.996 + -4.828 + 5.382 = $20 Mil.
Cash Flow from Operations was 395.335 + 438.156 + 298.84 + 237.66 = $1,370 Mil.
|Accounts Receivable was $680 Mil.
Revenue was 1617.729 + 1634.54 + 1603.999 + 1563.017 = $6,419 Mil.
Gross Profit was 342.275 + 345.681 + 332.4 + 296.058 = $1,316 Mil.
Total Current Assets was $1,062 Mil.
Total Assets was $9,104 Mil.
Property, Plant and Equipment(Net PPE) was $7,125 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,014 Mil.
Selling, General & Admin. Expense(SGA) was $791 Mil.
Total Current Liabilities was $1,231 Mil.
Long-Term Debt was $3,930 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)|
|=||(693.114 / 6638.774)||/||(680.345 / 6419.285)|
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)|
|=||(361.806 / 6419.285)||/||(369.695 / 6638.774)|
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 - (1076.197 + 7694.042) / 9675.986)||/||(1 - (1062.493 + 7124.663) / 9103.782)|
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))|
|=||(1013.53 / (1013.53 + 7124.663))||/||(1087.522 / (1087.522 + 7694.042))|
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)|
|=||(816.975 / 6638.774)||/||(790.681 / 6419.285)|
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)|
|=||((4500.275 + 1093.591) / 9675.986)||/||((3929.987 + 1231.139) / 9103.782)|
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|
|=||(218.575 - 19.937||-||1369.991)||/||9675.986|
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 -3.07 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