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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-1.85 (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 -1.85 signals that the company is a manipulator.

RCMT' s 10-Year Beneish M-Score Range
Min: -6.59   Max: -0.74
Current: -1.85

-6.59
-0.74

During the past 13 years, the highest Beneish M-Score of RCM Technologies Inc was -0.74. The lowest was -6.59. And the median was -2.35.


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 * 0.9535+0.528 * 1.042+0.404 * 0.9145+0.892 * 1.1967+0.115 * 1.294
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0344+4.679 * 0.1011-0.327 * 0.9623
=-1.85

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $64.2 Mil.
Revenue was 48.569 + 45.849 + 41.32 + 42.379 = $178.1 Mil.
Gross Profit was 12.257 + 11.794 + 10.684 + 11.262 = $46.0 Mil.
Total Current Assets was $74.7 Mil.
Total Assets was $88.6 Mil.
Property, Plant and Equipment(Net PPE) was $2.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $41.8 Mil.
Total Current Liabilities was $25.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.203 + -1.582 + 1.142 + 1.47 = $2.2 Mil.
Non Operating Income was -0.048 + -0.023 + 0.01 + 0.003 = $-0.1 Mil.
Cash Flow from Operations was -2.807 + -4.532 + 0.942 + -0.275 = $-6.7 Mil.
Accounts Receivable was $56.3 Mil.
Revenue was 41.23 + 37.019 + 34.839 + 35.753 = $148.8 Mil.
Gross Profit was 10.621 + 10.099 + 9.675 + 9.656 = $40.1 Mil.
Total Current Assets was $72.2 Mil.
Total Assets was $86.3 Mil.
Property, Plant and Equipment(Net PPE) was $2.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.3 Mil.
Selling, General & Admin. Expense(SGA) was $33.8 Mil.
Total Current Liabilities was $25.9 Mil.
Long-Term Debt was $0.0 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)
=(64.22 / 178.117) / (56.284 / 148.841)
=0.36054953 / 0.37814849
=0.9535

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)
=(11.794 / 148.841) / (12.257 / 178.117)
=0.2690858 / 0.25824037
=1.042

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 - (74.737 + 2.482) / 88.624) / (1 - (72.18 + 1.963) / 86.285)
=0.12868975 / 0.14071971
=0.9145

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
=178.117 / 148.841
=1.1967

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))
=(1.312 / (1.312 + 1.963)) / (1.113 / (1.113 + 2.482))
=0.40061069 / 0.30959666
=1.294

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)
=(41.805 / 178.117) / (33.773 / 148.841)
=0.23470528 / 0.22690656
=1.0344

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)
=((0 + 25.574) / 88.624) / ((0 + 25.874) / 86.285)
=0.28856743 / 0.29986672
=0.9623

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
=(2.233 - -0.058 - -6.672) / 88.624
=0.1011

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 -1.85 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.36411.03880.95840.92741.20530.96650.98760.9071.59680.9486
GMI 0.89171.02430.94471.01140.95890.9940.91021.00641.041.0485
AQI 0.94590.99951.10931.00540.361.04940.87950.90131.20610.9142
SGI 0.81931.0671.11791.06090.9770.82060.94350.88761.01391.1712
DEPI 0.89040.93710.90271.00160.94851.01950.89260.94790.75581.2637
SGAI 1.28690.96811.04040.94661.15081.06010.93741.02451.0041.0477
LVGI 0.90790.98270.57160.96761.85040.59430.89521.04611.78770.9645
TATA 0.048-0.00070.0078-0.0247-0.443-0.2484-0.0912-0.0249-0.00570.0658
M-score -2.19-2.37-2.24-2.58-4.97-3.69-3.03-2.84-2.13-2.04

RCM Technologies Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.9071.05791.07960.93861.59681.32351.13171.29520.94860.9535
GMI 1.00641.03581.04711.03131.041.03651.02541.04891.04851.042
AQI 0.90130.89720.87971.25561.20611.20051.24160.91730.91420.9145
SGI 0.88760.92220.95610.99081.01391.03861.09061.1261.17121.1967
DEPI 0.94790.92670.88990.78190.75580.8040.90541.10691.26371.294
SGAI 1.02451.00691.0130.98961.0041.01220.98240.96151.04771.0344
LVGI 1.04611.0051.53630.83651.78771.74211.20341.47170.96450.9623
TATA -0.0249-0.0416-0.0895-0.0081-0.00560.02960.06160.08390.06580.1011
M-score -2.84-2.72-3.08-2.43-2.13-2.18-1.95-1.85-2.04-1.85
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