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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-1.86 (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 -1.86 signals that the company is a manipulator.

RCMT' s 10-Year Beneish M-Score Range
Min: -6.59   Max: -0.74
Current: -1.86

-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 -2.39.


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 * 1.0909+0.528 * 0.9994+0.404 * 0.9605+0.892 * 1.1751+0.115 * 1.3848
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0565+4.679 * 0.0727-0.327 * 0.937
=-1.86

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $52.0 Mil.
Revenue was 46.382 + 49.509 + 48.569 + 45.849 = $190.3 Mil.
Gross Profit was 13.161 + 12.955 + 12.257 + 11.794 = $50.2 Mil.
Total Current Assets was $79.1 Mil.
Total Assets was $94.3 Mil.
Property, Plant and Equipment(Net PPE) was $3.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.2 Mil.
Selling, General & Admin. Expense(SGA) was $43.6 Mil.
Total Current Liabilities was $26.1 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.877 + 2.017 + 1.203 + -1.582 = $3.5 Mil.
Non Operating Income was 0.025 + 0.049 + -0.048 + -0.023 = $0.0 Mil.
Cash Flow from Operations was -2.723 + 6.714 + -2.807 + -4.532 = $-3.3 Mil.
Accounts Receivable was $40.5 Mil.
Revenue was 41.32 + 42.379 + 41.23 + 37.019 = $161.9 Mil.
Gross Profit was 10.684 + 11.262 + 10.621 + 10.099 = $42.7 Mil.
Total Current Assets was $76.0 Mil.
Total Assets was $90.0 Mil.
Property, Plant and Equipment(Net PPE) was $2.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.2 Mil.
Selling, General & Admin. Expense(SGA) was $35.1 Mil.
Total Current Liabilities was $26.6 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)
=(51.955 / 190.309) / (40.527 / 161.948)
=0.27300338 / 0.25024699
=1.0909

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)
=(12.955 / 161.948) / (13.161 / 190.309)
=0.26345494 / 0.26360813
=0.9994

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 - (79.052 + 3.445) / 94.34) / (1 - (75.98 + 2.219) / 89.956)
=0.1255353 / 0.13069723
=0.9605

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
=190.309 / 161.948
=1.1751

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))
=(1.197 / (1.197 + 2.219)) / (1.167 / (1.167 + 3.445))
=0.35040984 / 0.25303556
=1.3848

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)
=(43.583 / 190.309) / (35.104 / 161.948)
=0.22901177 / 0.21676094
=1.0565

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 + 26.094) / 94.34) / ((0 + 26.554) / 89.956)
=0.27659529 / 0.29518876
=0.937

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
=(3.515 - 0.003 - -3.348) / 94.34
=0.0727

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 -1.86 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 1.36411.03880.95840.89031.25550.96650.98760.73821.29290.9259
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 -2.19-2.37-2.24-2.61-4.93-3.69-3.03-3.00-2.41-2.06

RCM Technologies Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.74510.59551.29290.87431.06461.37430.92590.09591.11631.0909
GMI 1.04711.03131.041.03651.02541.04891.04851.0421.04080.9994
AQI 0.87971.25561.20611.20051.24160.91730.91420.91450.84220.9605
SGI 0.95610.99081.01391.03861.09061.1261.17121.19671.19161.1751
DEPI 0.88990.78190.75580.8040.90541.10691.26371.2941.42191.3848
SGAI 1.0130.98961.0041.01220.98240.96151.04771.03441.02171.0565
LVGI 1.53630.83651.78771.74211.20341.47170.96450.96231.1630.937
TATA -0.0895-0.0081-0.00560.02960.06160.08390.06580.10110.02610.0727
M-score -3.39-2.75-2.41-2.59-2.01-1.77-2.06-2.64-2.13-1.86
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