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Renewable Energy Group Inc (NAS:REGI)
Beneish M-Score
-2.40 (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.

Renewable Energy Group Inc has a M-score of -2.40 suggests that the company is not a manipulator.

REGI' s 10-Year Beneish M-Score Range
Min: -2.99   Max: 0.18
Current: -2.4

-2.99
0.18

During the past 6 years, the highest Beneish M-Score of Renewable Energy Group Inc was 0.18. The lowest was -2.99. And the median was -1.90.


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 Renewable Energy Group 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 * 0.5368+0.528 * 2.1283+0.404 * 2.2731+0.892 * 0.9905+0.115 * 1.1052
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4011+4.679 * -0.0502-0.327 * 1.9337
=-2.40

* 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 $35 Mil.
Revenue was 384.258 + 332.918 + 219.04 + 390.591 = $1,327 Mil.
Gross Profit was 22.715 + 15.151 + 11.564 + 44.708 = $94 Mil.
Total Current Assets was $253 Mil.
Total Assets was $1,056 Mil.
Property, Plant and Equipment(Net PPE) was $462 Mil.
Depreciation, Depletion and Amortization(DDA) was $13 Mil.
Selling, General & Admin. Expense(SGA) was $58 Mil.
Total Current Liabilities was $84 Mil.
Long-Term Debt was $249 Mil.
Net Income was 4.572 + 11.007 + -2.359 + 30.13 = $43 Mil.
Non Operating Income was 1.183 + 0.768 + 0.048 + 0.112 = $2 Mil.
Cash Flow from Operations was 47.181 + -0.647 + 24.82 + 22.846 = $94 Mil.
Accounts Receivable was $67 Mil.
Revenue was 458.444 + 384.735 + 264.368 + 231.948 = $1,339 Mil.
Gross Profit was 57.849 + 50.181 + 86.695 + 7.549 = $202 Mil.
Total Current Assets was $302 Mil.
Total Assets was $686 Mil.
Property, Plant and Equipment(Net PPE) was $286 Mil.
Depreciation, Depletion and Amortization(DDA) was $9 Mil.
Selling, General & Admin. Expense(SGA) was $42 Mil.
Total Current Liabilities was $91 Mil.
Long-Term Debt was $21 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)
=(35.422 / 1326.807) / (66.621 / 1339.495)
=0.02669718 / 0.04973591
=0.5368

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)
=(15.151 / 1339.495) / (22.715 / 1326.807)
=0.15100766 / 0.07095079
=2.1283

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 - (253.238 + 462.053) / 1055.684) / (1 - (302.376 + 286.14) / 685.794)
=0.32243834 / 0.14184726
=2.2731

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
=1326.807 / 1339.495
=0.9905

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))
=(8.629 / (8.629 + 286.14)) / (12.571 / (12.571 + 462.053))
=0.02927377 / 0.02648623
=1.1052

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)
=(58.428 / 1326.807) / (42.1 / 1339.495)
=0.04403655 / 0.03142976
=1.4011

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)
=((248.553 + 84.475) / 1055.684) / ((21.36 + 90.522) / 685.794)
=0.31546182 / 0.16314228
=1.9337

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
=(43.35 - 2.111 - 94.2) / 1055.684
=-0.0502

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.

Renewable Energy Group Inc has a M-score of -2.40 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.

Renewable Energy Group Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.28842.9777
GMI 2.68670.3595
AQI 0.94090.6944
SGI 1.23181.4759
DEPI 1.2681.0051
SGAI 0.99880.7366
LVGI 0.55091.1055
TATA -0.07030.0625
M-score -2.21-0.39

Renewable Energy Group Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.50340.62780.28843.39862.11071.30142.97770.1350.53940.5368
GMI 0.87911.9942.68671.27741.13570.5350.35951.03711.32522.1283
AQI 0.71410.81630.94090.77190.84170.7630.69441.42512.05252.2731
SGI 2.26931.67511.23181.20191.22421.27591.47591.33141.16370.9905
DEPI 0.89740.95871.2681.30451.29041.24581.00510.94521.24241.1052
SGAI 0.76790.83990.99880.79040.72390.76340.73660.96051.18921.4011
LVGI 0.680.70380.55091.16660.96040.69761.10550.44791.39151.9337
TATA 0.0397-0.0215-0.07030.0435-0.02310.01660.0625-0.08120.0044-0.0502
M-score -1.67-1.75-2.210.18-1.26-2.05-0.39-2.99-2.27-2.40
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