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Resource America Inc (NAS:REXI)
Beneish M-Score
-1.27 (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 -1.27 signals that the company is a manipulator.

REXI' s Beneish M-Score Range Over the Past 10 Years
Min: -39.82   Max: 3.84
Current: -1.27

-39.82
3.84

During the past 13 years, the highest Beneish M-Score of Resource America Inc was 3.84. The lowest was -39.82. 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 * 0.7273+0.528 * 3.781+0.404 * 0.792+0.892 * 1.2758+0.115 * 0.8398
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0901+4.679 * -0.0716-0.327 * 0.379
=-1.27

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $25.6 Mil.
Revenue was 26.139 + 25.968 + -29.007 + 40.677 = $63.8 Mil.
Gross Profit was 6.67 + 10.878 + -46.185 + 25.651 = $-3.0 Mil.
Total Current Assets was $53.3 Mil.
Total Assets was $211.2 Mil.
Property, Plant and Equipment(Net PPE) was $4.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General & Admin. Expense(SGA) was $17.7 Mil.
Total Current Liabilities was $30.7 Mil.
Long-Term Debt was $20.3 Mil.
Net Income was -0.272 + 3.037 + 8.605 + -1.1 = $10.3 Mil.
Non Operating Income was -0.434 + 0.693 + -31.279 + 5.012 = $-26.0 Mil.
Cash Flow from Operations was 15.253 + 2.714 + 10.331 + 23.109 = $51.4 Mil.
Accounts Receivable was $27.6 Mil.
Revenue was 27.285 + 23.839 + -42.64 + 41.504 = $50.0 Mil.
Gross Profit was 11.507 + 8.698 + -58.237 + 29.183 = $-8.8 Mil.
Total Current Assets was $243.0 Mil.
Total Assets was $2,942.7 Mil.
Property, Plant and Equipment(Net PPE) was $5.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.9 Mil.
Selling, General & Admin. Expense(SGA) was $12.7 Mil.
Total Current Liabilities was $26.0 Mil.
Long-Term Debt was $1,848.8 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)
=(25.594 / 63.777) / (27.581 / 49.988)
=0.40130455 / 0.55175242
=0.7273

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)
=(-8.849 / 49.988) / (-2.986 / 63.777)
=-0.17702249 / -0.04681939
=3.781

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 - (53.344 + 4.712) / 211.215) / (1 - (242.992 + 5.622) / 2942.705)
=0.72513316 / 0.91551515
=0.792

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
=63.777 / 49.988
=1.2758

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))
=(1.949 / (1.949 + 5.622)) / (2.083 / (2.083 + 4.712))
=0.25742967 / 0.30654893
=0.8398

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)
=(17.682 / 63.777) / (12.713 / 49.988)
=0.27724728 / 0.25432104
=1.0901

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)
=((20.272 + 30.725) / 211.215) / ((1848.822 + 25.989) / 2942.705)
=0.24144592 / 0.63710464
=0.379

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
=(10.27 - -26.008 - 51.407) / 211.215
=-0.0716

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 -1.27 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.

Resource America Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Dec13Dec14Dec15
DSRI 0.65032.21790.73952.17041.46290.42230.68561.84930.99190.7346
GMI 0.82410.86181.42491.08791.14330.50710.89732.1180.92350.9858
AQI 1.37170.88331.45050.83980.76971.56741.02230.9180.80711.0604
SGI 1.59971.68191.23010.68960.82521.88141.02380.44811.09451.1914
DEPI 0.2741.08160.88010.66090.72640.78921.08292.39090.96861.0056
SGAI 0.72960.7231.10081.29591.09410.47210.88682.19080.98931.1947
LVGI 0.90691.62341.01750.77140.71931.73840.89230.84930.34911.1759
TATA 0.1298-0.0853-0.09750.1149-0.176-0.0148-0.0187-0.006-0.0436-0.1094
M-score -1.61-1.42-2.60-1.18-3.01-2.50-2.82-1.66-2.51-3.14

Resource America Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.63180.99191.3141.16810.92920.7273
GMI 1.72220.9235-1.5206-69.50695.37783.781
AQI 0.87570.80711.20121.06040.83760.792
SGI 0.61381.09450.59090.74920.99821.2758
DEPI 0.98510.96861.10251.00560.85760.8398
SGAI 2.11590.98932.06181.89991.54891.0901
LVGI 0.98090.34911.10661.17590.35340.379
TATA -0.0337-0.04370.02610.0304-0.0081-0.0716
M-score -2.26-2.51-3.89-39.82-0.24-1.27
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