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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-3.78 (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.

RCM Technologies Inc has a M-score of -3.78 suggests that the company is not a manipulator.

RCMT' s Beneish M-Score Range Over the Past 10 Years
Min: -6.59   Max: 7.01
Current: -3.78

-6.59
7.01

During the past 13 years, the highest Beneish M-Score of RCM Technologies Inc was 7.01. The lowest was -6.59. And the median was -2.48.


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 RCM Technologies 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 * 0.691+0.528 * 0.9908+0.404 * 1.3296+0.892 * 0.9793+0.115 * 1.013
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0329+4.679 * -0.2356-0.327 * 1.0618
=-3.78

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $40.4 Mil.
Revenue was 45.379 + 47.176 + 47.407 + 45.077 = $185.0 Mil.
Gross Profit was 12.104 + 12.676 + 13.69 + 12.802 = $51.3 Mil.
Total Current Assets was $54.0 Mil.
Total Assets was $70.7 Mil.
Property, Plant and Equipment(Net PPE) was $4.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.6 Mil.
Selling, General & Admin. Expense(SGA) was $42.0 Mil.
Total Current Liabilities was $20.7 Mil.
Long-Term Debt was $14.9 Mil.
Net Income was 0.863 + 1.001 + 2.976 + 0.962 = $5.8 Mil.
Non Operating Income was 0.011 + 0.012 + -0.132 + -0.061 = $-0.2 Mil.
Cash Flow from Operations was 6.627 + 1.054 + 4.993 + 9.963 = $22.6 Mil.
Accounts Receivable was $59.7 Mil.
Revenue was 45.286 + 47.966 + 49.31 + 46.382 = $188.9 Mil.
Gross Profit was 12.09 + 13.303 + 13.32 + 13.161 = $51.9 Mil.
Total Current Assets was $71.0 Mil.
Total Assets was $85.8 Mil.
Property, Plant and Equipment(Net PPE) was $3.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.3 Mil.
Selling, General & Admin. Expense(SGA) was $41.5 Mil.
Total Current Liabilities was $20.6 Mil.
Long-Term Debt was $20.0 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)
=(40.369 / 185.039) / (59.651 / 188.944)
=0.21816482 / 0.3157073
=0.691

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)
=(51.874 / 188.944) / (51.272 / 185.039)
=0.27454696 / 0.27708753
=0.9908

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 - (53.952 + 4.611) / 70.741) / (1 - (70.969 + 3.682) / 85.754)
=0.17214911 / 0.12947501
=1.3296

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
=185.039 / 188.944
=0.9793

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))
=(1.305 / (1.305 + 3.682)) / (1.606 / (1.606 + 4.611))
=0.26168037 / 0.25832395
=1.013

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)
=(42.031 / 185.039) / (41.549 / 188.944)
=0.22714671 / 0.21990113
=1.0329

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)
=((14.89 + 20.678) / 70.741) / ((20 + 20.605) / 85.754)
=0.50279187 / 0.47350561
=1.0618

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
=(5.802 - -0.17 - 22.637) / 70.741
=-0.2356

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.

RCM Technologies Inc has a M-score of -3.78 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 own currency.

RCM Technologies Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95840.89031.25550.96650.98760.73821.29291.24891.0720.9678
GMI 0.94471.01140.95890.9940.91021.00641.041.04850.97370.955
AQI 1.10931.00540.361.04940.87950.90131.20610.91420.98011.14
SGI 1.11791.06090.9770.82060.94350.88761.01391.17121.13460.9585
DEPI 0.90271.00160.94851.01950.89260.94790.75581.26371.22161.1235
SGAI 1.04040.94661.15081.06010.93741.02451.0041.04770.86571.111
LVGI 0.57160.96761.85040.59430.89521.04611.78770.96451.74861.1774
TATA 0.0078-0.0247-0.443-0.2495-0.0912-0.0249-0.00570.06580.0285-0.0771
M-score -2.24-2.61-4.93-3.70-3.03-3.00-2.41-1.77-2.38-2.94

RCM Technologies Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.09591.11631.09091.07211.16691.23170.83920.96781.12390.691
GMI 1.0421.04080.99940.97370.94590.93770.96020.9550.98510.9908
AQI 0.91450.84220.96050.98011.02361.08881.22041.141.22621.3296
SGI 1.19671.19161.17511.13461.08451.020.9860.95850.95740.9793
DEPI 1.2941.42191.38481.22161.20760.99981.12531.12351.04241.013
SGAI 1.03441.02171.05650.86570.89670.96550.97791.1111.08931.0329
LVGI 0.96231.1630.9371.74861.68741.53131.59661.17741.12381.0618
TATA 0.10110.02610.07270.02850.05550.0902-0.0708-0.0771-0.1659-0.2356
M-score -2.64-2.13-1.86-2.387.01-1.99-3.08-2.94-3.15-3.78
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