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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-3.08 (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 -3.08 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: -3.08

-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 -2.39.


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 * 0.8392+0.528 * 0.9602+0.404 * 1.2204+0.892 * 0.986+0.115 * 1.1253
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9779+4.679 * -0.071-0.327 * 1.5966
=-3.08

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $43.0 Mil.
Revenue was 45.077 + 45.286 + 47.966 + 49.31 = $187.6 Mil.
Gross Profit was 12.802 + 12.09 + 13.303 + 13.32 = $51.5 Mil.
Total Current Assets was $64.3 Mil.
Total Assets was $81.7 Mil.
Property, Plant and Equipment(Net PPE) was $4.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.4 Mil.
Selling, General & Admin. Expense(SGA) was $42.0 Mil.
Total Current Liabilities was $21.1 Mil.
Long-Term Debt was $15.0 Mil.
Net Income was 0.962 + 0.689 + 1.388 + 1.717 = $4.8 Mil.
Non Operating Income was -0.061 + 0.011 + -0.011 + 0.131 = $0.1 Mil.
Cash Flow from Operations was 9.963 + 2.434 + -4.909 + 2.997 = $10.5 Mil.
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.



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)
=(42.989 / 187.639) / (51.955 / 190.309)
=0.22910482 / 0.27300338
=0.8392

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)
=(12.09 / 190.309) / (12.802 / 187.639)
=0.26360813 / 0.27454314
=0.9602

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 - (64.328 + 4.833) / 81.674) / (1 - (79.052 + 3.445) / 94.34)
=0.15320665 / 0.1255353
=1.2204

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
=187.639 / 190.309
=0.986

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))
=(1.167 / (1.167 + 3.445)) / (1.402 / (1.402 + 4.833))
=0.25303556 / 0.22485966
=1.1253

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)
=(42.02 / 187.639) / (43.583 / 190.309)
=0.22394065 / 0.22901177
=0.9779

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)
=((15 + 21.068) / 81.674) / ((0 + 26.094) / 94.34)
=0.44160932 / 0.27659529
=1.5966

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
=(4.756 - 0.07 - 10.485) / 81.674
=-0.071

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 -3.08 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.03880.95840.89031.25550.96650.98760.73821.29291.24890.9894
GMI 1.02430.94471.01140.95890.9940.91021.00641.041.04850.9737
AQI 0.99951.10931.00540.361.04940.87950.90131.20610.91420.9801
SGI 1.0671.11791.06090.9770.82060.94350.88761.01391.17121.1346
DEPI 0.93710.90271.00160.94851.01950.89260.94790.75581.26371.2216
SGAI 0.96811.04040.94661.15081.06010.93741.02451.0041.04770.8657
LVGI 0.98270.57160.96761.85040.59430.89521.04611.78770.96451.7486
TATA -0.00070.0078-0.0247-0.443-0.2484-0.0912-0.0249-0.00570.06580.0284
M-score -2.37-2.24-2.61-4.93-3.69-3.03-3.00-2.41-1.77-2.45

RCM Technologies Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.06461.37431.24890.09591.11631.09090.989411.16691.23170.8392
GMI 1.02541.04891.04851.0421.04080.99940.97370.94590.93770.9602
AQI 1.24160.91730.91420.91450.84220.96050.98011.02361.08881.2204
SGI 1.09061.1261.17121.19671.19161.17511.13461.08451.020.986
DEPI 0.90541.10691.26371.2941.42191.38481.22161.20760.99981.1253
SGAI 0.98240.96151.04771.03441.02171.05650.86570.89670.96550.9779
LVGI 1.20341.47170.96450.96231.1630.9371.74861.68741.53131.5966
TATA 0.06160.08390.06580.10110.02610.07270.02840.05530.09-0.071
M-score -2.01-1.77-1.77-2.64-2.13-1.86-2.457.01-1.99-3.08
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