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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-2.46 (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 -2.45 suggests that the company is not a manipulator.

RCMT' s 10-Year Beneish M-Score Range
Min: -4.93   Max: -0.81
Current: -2.46

-4.93
-0.81

During the past 13 years, the highest Beneish M-Score of RCM Technologies Inc was -0.81. The lowest was -4.93. And the median was -2.44.


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 * 0.9894+0.528 * 0.9737+0.404 * 0.9801+0.892 * 1.1346+0.115 * 1.2216
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8657+4.679 * 0.0284-0.327 * 1.7486
=-2.45

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $58.1 Mil.
Revenue was 49.31 + 46.382 + 49.509 + 48.569 = $193.8 Mil.
Gross Profit was 13.32 + 13.161 + 12.955 + 12.257 = $51.7 Mil.
Total Current Assets was $72.6 Mil.
Total Assets was $87.3 Mil.
Property, Plant and Equipment(Net PPE) was $3.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.2 Mil.
Selling, General & Admin. Expense(SGA) was $40.0 Mil.
Total Current Liabilities was $23.6 Mil.
Long-Term Debt was $20.0 Mil.
Net Income was 1.717 + 1.877 + 2.017 + 1.203 = $6.8 Mil.
Non Operating Income was 0.131 + 0.025 + 0.049 + -0.048 = $0.2 Mil.
Cash Flow from Operations was 2.997 + -2.723 + 6.714 + -2.807 = $4.2 Mil.
Accounts Receivable was $51.8 Mil.
Revenue was 45.849 + 41.32 + 42.379 + 41.23 = $170.8 Mil.
Gross Profit was 11.794 + 10.684 + 11.262 + 10.621 = $44.4 Mil.
Total Current Assets was $72.7 Mil.
Total Assets was $86.5 Mil.
Property, Plant and Equipment(Net PPE) was $2.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.1 Mil.
Selling, General & Admin. Expense(SGA) was $40.7 Mil.
Total Current Liabilities was $24.7 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)
=(58.131 / 193.77) / (51.784 / 170.778)
=0.3 / 0.30322407
=0.9894

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)
=(13.161 / 170.778) / (13.32 / 193.77)
=0.25975828 / 0.26677504
=0.9737

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 - (72.579 + 3.297) / 87.273) / (1 - (72.704 + 2.291) / 86.524)
=0.13059022 / 0.13324627
=0.9801

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
=193.77 / 170.778
=1.1346

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))
=(1.111 / (1.111 + 2.291)) / (1.203 / (1.203 + 3.297))
=0.3265726 / 0.26733333
=1.2216

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)
=(39.972 / 193.77) / (40.695 / 170.778)
=0.2062858 / 0.23829182
=0.8657

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)
=((20 + 23.633) / 87.273) / ((0 + 24.739) / 86.524)
=0.4999599 / 0.28592067
=1.7486

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
=(6.814 - 0.157 - 4.181) / 87.273
=0.0284

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 -2.45 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.59551.29290.87431.06461.37431.24890.09591.11631.09090.9894
GMI 1.03131.041.03651.02541.04891.04851.0421.04080.99940.9737
AQI 1.25561.20611.20051.24160.91730.91420.91450.84220.96050.9801
SGI 0.99081.01391.03861.09061.1261.17121.19671.19161.17511.1346
DEPI 0.78190.75580.8040.90541.10691.26371.2941.42191.38481.2216
SGAI 0.98961.0041.01220.98240.96151.04771.03441.02171.05650.8657
LVGI 0.83651.78771.74211.20341.47170.96450.96231.1630.9371.7486
TATA -0.0081-0.00560.02960.06160.08390.06580.10110.02610.07270.0284
M-score -2.75-2.41-2.59-2.01-1.77-1.77-2.64-2.13-1.86-2.45
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