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GuruFocus has detected 4 Warning Signs with Ryder System Inc $R.
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Ryder System Inc (NYSE:R)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

R' s Beneish M-Score Range Over the Past 10 Years
Min: -3.64   Max: -2.06
Current: -3.02

-3.64
-2.06

During the past 13 years, the highest Beneish M-Score of Ryder System Inc was -2.06. The lowest was -3.64. 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 * 1.0105+0.528 * 1.0217+0.404 * 0.9549+0.892 * 1.0327+0.115 * 0.9555
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9662+4.679 * -0.1236-0.327 * 0.9732
=-3.02

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $740 Mil.
Revenue was 1729.15 + 1724.418 + 1703.744 + 1629.672 = $6,787 Mil.
Gross Profit was 377.194 + 390.82 + 386.835 + 346.567 = $1,501 Mil.
Total Current Assets was $1,102 Mil.
Total Assets was $10,902 Mil.
Property, Plant and Equipment(Net PPE) was $8,894 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,255 Mil.
Selling, General & Admin. Expense(SGA) was $843 Mil.
Total Current Liabilities was $1,744 Mil.
Long-Term Debt was $4,600 Mil.
Net Income was 48.181 + 84.752 + 73.75 + 55.794 = $262 Mil.
Non Operating Income was -35.004 + 5.12 + 17.456 + 21.394 = $9 Mil.
Cash Flow from Operations was 416.278 + 422.072 + 397.663 + 365.009 = $1,601 Mil.
Accounts Receivable was $709 Mil.
Revenue was 1672.743 + 1669.066 + 1662.931 + 1567.153 = $6,572 Mil.
Gross Profit was 386.774 + 382.599 + 385.959 + 330.112 = $1,485 Mil.
Total Current Assets was $1,098 Mil.
Total Assets was $10,953 Mil.
Property, Plant and Equipment(Net PPE) was $8,900 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,193 Mil.
Selling, General & Admin. Expense(SGA) was $844 Mil.
Total Current Liabilities was $1,680 Mil.
Long-Term Debt was $4,868 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)
=(739.743 / 6786.984) / (708.832 / 6571.893)
=0.10899436 / 0.10785812
=1.0105

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)
=(1485.444 / 6571.893) / (1501.416 / 6786.984)
=0.22602985 / 0.22121991
=1.0217

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 - (1101.557 + 8893.592) / 10902.454) / (1 - (1098.302 + 8899.705) / 10952.58)
=0.08322025 / 0.08715508
=0.9549

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
=6786.984 / 6571.893
=1.0327

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))
=(1192.728 / (1192.728 + 8899.705)) / (1255.31 / (1255.31 + 8893.592))
=0.11818042 / 0.12368924
=0.9555

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)
=(842.697 / 6786.984) / (844.497 / 6571.893)
=0.12416369 / 0.12850133
=0.9662

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)
=((4599.864 + 1744.069) / 10902.454) / ((4868.097 + 1680.255) / 10952.58)
=0.5818812 / 0.59788214
=0.9732

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
=(262.477 - 8.966 - 1601.022) / 10902.454
=-0.1236

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 -3.02 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

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.99580.98510.92841.00110.99791.03311.05061.00731.02491.0105
GMI 0.98330.98530.95980.9310.91980.92320.94510.97910.99831.0217
AQI 0.94510.91320.940.91890.90340.94790.94210.98410.97630.9549
SGI 1.03371.03421.01981.0040.99320.98991.00591.01551.02671.0327
DEPI 1.00631.04711.02461.07231.09951.02931.03610.96650.95760.9555
SGAI 1.00160.99911.02821.05541.06131.04421.01470.99680.97970.9662
LVGI 1.02071.03951.01551.02561.0471.01461.01350.9870.97140.9732
TATA -0.1332-0.1213-0.1243-0.1206-0.1148-0.1126-0.1178-0.1188-0.1186-0.1236
M-score -3.11-3.08-3.16-3.12-3.12-3.06-3.03-3.03-2.99-3.02
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