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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(11.794 / 148.841)||/||(12.257 / 178.117)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(2.233 - -0.058||-||-6.672)||/||88.624|
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.
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
RCM Technologies Inc Annual Data
RCM Technologies Inc Quarterly Data