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RCM Technologies Inc (NAS:RCMT)
Beneish M-Score
-2.04 (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 -2.04 signals that the company is a manipulator.

RCMT' s 10-Year Beneish M-Score Range
Min: -4.97   Max: -0.81
Current: -2.04

-4.97
-0.81

During the past 13 years, the highest Beneish M-Score of RCM Technologies Inc was -0.81. The lowest was -4.97. And the median was -2.37.


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 * 0.9486+0.528 * 1.0485+0.404 * 0.9142+0.892 * 1.1712+0.115 * 1.2637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0477+4.679 * 0.0658-0.327 * 0.9645
=-2.04

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $59.7 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.
Net Income was -1.582 + 1.142 + 1.47 + 0.96 = $2.0 Mil.
Non Operating Income was -0.023 + 0.01 + 0.003 + 0.097 = $0.1 Mil.
Cash Flow from Operations was -4.532 + 0.942 + -0.275 + 0.073 = $-3.8 Mil.
Accounts Receivable was $53.7 Mil.
Revenue was 37.019 + 34.839 + 35.753 + 38.206 = $145.8 Mil.
Gross Profit was 10.099 + 9.675 + 9.656 + 10.285 = $39.7 Mil.
Total Current Assets was $70.3 Mil.
Total Assets was $84.5 Mil.
Property, Plant and Equipment(Net PPE) was $1.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.3 Mil.
Selling, General & Admin. Expense(SGA) was $33.2 Mil.
Total Current Liabilities was $25.1 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)
=(59.679 / 170.778) / (53.716 / 145.817)
=0.34945368 / 0.36837954
=0.9486

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)
=(10.684 / 145.817) / (11.794 / 170.778)
=0.27236193 / 0.25975828
=1.0485

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 - (72.704 + 2.291) / 86.524) / (1 - (70.345 + 1.88) / 84.548)
=0.13324627 / 0.14575153
=0.9142

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
=170.778 / 145.817
=1.1712

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))
=(1.321 / (1.321 + 1.88)) / (1.111 / (1.111 + 2.291))
=0.41268354 / 0.3265726
=1.2637

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)
=(40.695 / 170.778) / (33.166 / 145.817)
=0.23829182 / 0.22744947
=1.0477

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 + 24.739) / 86.524) / ((0 + 25.063) / 84.548)
=0.28592067 / 0.29643516
=0.9645

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
=(1.99 - 0.087 - -3.792) / 86.524
=0.0658

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 -2.04 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.35310.9071.05791.07960.93861.59681.32351.13171.29520.9486
GMI 0.9731.00641.03581.04711.03131.041.03651.02541.04891.0485
AQI 0.86320.90130.89720.87971.25561.20611.20051.24160.91730.9142
SGI 0.85020.88760.92220.95610.99081.01391.03861.09061.1261.1712
DEPI 0.95890.94790.92670.88990.78190.75580.8040.90541.10691.2637
SGAI 1.02391.02451.00691.0130.98961.0041.01220.98240.96151.0477
LVGI 1.2181.04611.0051.53630.83651.78771.74211.20341.47170.9645
TATA -0.0359-0.0249-0.0416-0.0895-0.0081-0.00560.02960.06160.08390.0658
M-score -2.61-2.84-2.72-3.08-2.43-2.13-2.18-1.95-1.85-2.04
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