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Resource America Inc (NAS:REXI)
Beneish M-Score
-2.45 (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.

Resource America Inc has a M-score of -2.45 suggests that the company is not a manipulator.

REXI' s 10-Year Beneish M-Score Range
Min: -4.39   Max: 3.83
Current: -2.45

-4.39
3.83

During the past 13 years, the highest Beneish M-Score of Resource America Inc was 3.83. The lowest was -4.39. And the median was -2.16.


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 Resource America 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 * 0.727+0.528 * 0.9096+0.404 * 0.8757+0.892 * 1.3777+0.115 * 0.9851
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9426+4.679 * 0.0068-0.327 * 0.9809
=-2.45

* 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 $33.7 Mil.
Revenue was 50.409 + 53.115 + 49.302 + 33.911 = $186.7 Mil.
Gross Profit was 38.088 + 41.108 + 35.935 + 20.272 = $135.4 Mil.
Total Current Assets was $597.9 Mil.
Total Assets was $2,763.1 Mil.
Property, Plant and Equipment(Net PPE) was $5.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General & Admin. Expense(SGA) was $11.8 Mil.
Total Current Liabilities was $22.7 Mil.
Long-Term Debt was $1,611.7 Mil.
Net Income was 1.516 + 2.718 + 0.99 + 1.375 = $6.6 Mil.
Non Operating Income was -1.776 + 2.908 + -1.148 + 0.595 = $0.6 Mil.
Cash Flow from Operations was 46.931 + -64.027 + 113.88 + -109.614 = $-12.8 Mil.
Accounts Receivable was $33.6 Mil.
Revenue was 43.025 + 33.485 + 43.327 + 15.705 = $135.5 Mil.
Gross Profit was 28.225 + 23.114 + 31.314 + 6.739 = $89.4 Mil.
Total Current Assets was $257.3 Mil.
Total Assets was $2,443.5 Mil.
Property, Plant and Equipment(Net PPE) was $5.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.0 Mil.
Selling, General & Admin. Expense(SGA) was $9.1 Mil.
Total Current Liabilities was $30.7 Mil.
Long-Term Debt was $1,442.8 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)
=(33.688 / 186.737) / (33.636 / 135.542)
=0.18040346 / 0.24815924
=0.727

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)
=(41.108 / 135.542) / (38.088 / 186.737)
=0.65951513 / 0.72510001
=0.9096

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 - (597.898 + 5.177) / 2763.102) / (1 - (257.291 + 4.955) / 2443.511)
=0.78173987 / 0.89267656
=0.8757

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
=186.737 / 135.542
=1.3777

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))
=(2.012 / (2.012 + 4.955)) / (2.147 / (2.147 + 5.177))
=0.28879001 / 0.29314582
=0.9851

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)
=(11.77 / 186.737) / (9.063 / 135.542)
=0.06302982 / 0.06686488
=0.9426

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)
=((1611.692 + 22.722) / 2763.102) / ((1442.81 + 30.65) / 2443.511)
=0.59151418 / 0.60300936
=0.9809

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
=(6.599 - 0.579 - -12.83) / 2763.102
=0.0068

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.

Resource America 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.

Resource America Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Dec13
DSRI 0.08682.050.65032.21790.73952.15781.47140.86051.04840.2956
GMI 3.09260.79270.82410.86181.42491.07721.15461.08131.26510.3539
AQI 2.5530.84681.37170.88331.45050.83980.76971.30580.88751.2693
SGI 1.33921.86681.59971.68191.23010.69360.82040.96940.74912.3861
DEPI 0.29560.39390.2741.08160.88010.66090.72640.82331.0382.3909
SGAI 0.37230.47540.72960.7231.10081.28841.10050.91621.21190.4114
LVGI 0.51491.84280.90691.62341.01750.77140.71931.40140.40912.2978
TATA -0.01820.02140.1257-0.0872-0.08050.1334-0.1787-0.0436-0.17050.0344
M-score -1.18-1.07-1.63-1.43-2.52-1.10-3.01-2.81-3.20-2.13

Resource America Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99181.04841.02220.53610.41350.35850.32130.65180.70180.727
GMI 1.03031.26511.1170.63910.42650.35930.44470.77290.86820.9096
AQI 0.88750.88751.20481.48831.38371.35761.16770.94990.98670.8757
SGI 0.8240.74910.69861.09211.59882.10352.50091.77421.63461.3777
DEPI 0.80571.0381.68191.70961.6462.21911.771.67881.62420.9851
SGAI 1.05491.21191.24370.80060.52510.41190.41810.66820.79760.9426
LVGI 0.39290.40910.77012.21272.72252.3522.34910.9220.9530.9809
TATA -0.1666-0.1705-0.1361-0.02740.0135-0.01160.03450.005-0.0020.0068
M-score -3.29-3.20-3.11-3.23-2.98-2.53-2.08-2.07-2.15-2.45
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