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Resource America Inc (NAS:REXI)
Beneish M-Score
-2.15 (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 -2.15 signals that the company is a manipulator.

REXI' s 10-Year Beneish M-Score Range
Min: -4.39   Max: 3.81
Current: -2.15

-4.39
3.81

During the past 13 years, the highest Beneish M-Score of Resource America Inc was 3.81. The lowest was -4.39. And the median was -2.23.


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 * 1.4227+0.528 * 1.1588+0.404 * 0.9499+0.892 * 0.8129+0.115 * 1.6788
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4583+4.679 * 0.005-0.327 * 0.922
=-2.15

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $35.1 Mil.
Revenue was 49.302 + 33.911 + 43.025 + 33.485 = $159.7 Mil.
Gross Profit was 35.935 + 20.272 + 28.225 + 23.114 = $107.5 Mil.
Total Current Assets was $335.6 Mil.
Total Assets was $2,509.9 Mil.
Property, Plant and Equipment(Net PPE) was $5.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.2 Mil.
Selling, General & Admin. Expense(SGA) was $11.3 Mil.
Total Current Liabilities was $25.8 Mil.
Long-Term Debt was $1,522.8 Mil.
Net Income was 0.99 + 1.375 + 3.442 + 1.113 = $6.9 Mil.
Non Operating Income was -1.148 + 0.595 + 16.897 + 0.114 = $16.5 Mil.
Cash Flow from Operations was 113.88 + -109.614 + 56.783 + -83.193 = $-22.1 Mil.
Accounts Receivable was $30.3 Mil.
Revenue was 43.327 + 15.705 + 123.672 + 13.784 = $196.5 Mil.
Gross Profit was 31.314 + 6.739 + 111.976 + 3.286 = $153.3 Mil.
Total Current Assets was $226.0 Mil.
Total Assets was $2,528.8 Mil.
Property, Plant and Equipment(Net PPE) was $2.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.2 Mil.
Selling, General & Admin. Expense(SGA) was $9.5 Mil.
Total Current Liabilities was $21.7 Mil.
Long-Term Debt was $1,670.6 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)
=(35.078 / 159.723) / (30.332 / 196.488)
=0.21961771 / 0.15437075
=1.4227

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)
=(20.272 / 196.488) / (35.935 / 159.723)
=0.78027666 / 0.6733282
=1.1588

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 - (335.553 + 5.566) / 2509.891) / (1 - (226.04 + 2.446) / 2528.778)
=0.86409011 / 0.90964569
=0.9499

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
=159.723 / 196.488
=0.8129

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))
=(2.188 / (2.188 + 2.446)) / (2.178 / (2.178 + 5.566))
=0.47216228 / 0.28125
=1.6788

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)
=(11.269 / 159.723) / (9.506 / 196.488)
=0.0705534 / 0.04837954
=1.4583

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)
=((1522.767 + 25.81) / 2509.891) / ((1670.586 + 21.69) / 2528.778)
=0.61698974 / 0.66920702
=0.922

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
=(6.92 - 16.458 - -22.144) / 2509.891
=0.005

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 -2.15 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

Sep03Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12
DSRI 9.18220.44090.56510.46422.21790.73952.17041.46290.42230.6856
GMI 0.37153.09260.79270.82410.86181.42491.08791.14330.50710.8973
AQI 0.36552.5530.84681.37170.88331.45050.83980.76971.56741.0223
SGI 0.16281.33921.86681.59971.68191.23010.68960.82521.88141.0238
DEPI 11.68050.29560.39390.2741.08160.88010.66090.72640.78921.0829
SGAI 12.50970.37230.47540.72960.7231.10081.29591.09410.47210.8868
LVGI 1.34810.51491.84280.90691.62341.01750.77140.71931.73840.8923
TATA -0.013-0.01820.02140.1257-0.0872-0.08050.1149-0.176-0.0148-0.0187
M-score 2.79-0.86-2.43-1.80-1.43-2.52-1.18-3.01-2.50-2.82

Resource America Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.41450.42330.45520.68560.71830.48680.45731.11690.87781.4227
GMI 0.33670.33010.40460.89730.8780.850.82411.081.10971.1588
AQI 0.97950.85540.88751.02231.20481.48831.38370.98181.16770.9499
SGI 2.11182.01831.79561.02380.99421.20291.44570.79310.91550.8129
DEPI 0.67130.7210.80391.08291.68361.71181.64982.21911.771.6788
SGAI 0.42290.42130.48410.88680.87390.72690.58071.09251.14211.4583
LVGI 0.74260.52580.39290.89230.77012.21272.72250.86932.34910.922
TATA -0.228-0.1996-0.2698-0.0185-0.218-0.03370.0082-0.01160.03450.005
M-score -3.31-3.23-3.63-2.82-3.57-3.08-2.90-2.41-2.76-2.15
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