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Resource America Inc (NAS:REXI)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

REXI' s 10-Year Beneish M-Score Range
Min: -4.39   Max: 3.83
Current: -2.85

-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 -2.24.


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 * 0.7969+0.528 * 1.0705+0.404 * 1.0583+0.892 * 0.9618+0.115 * 1.1043
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1156+4.679 * -0.0377-0.327 * 1.0704
=-2.85

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $27.6 Mil.
Revenue was 45.996 + 42.189 + 17.104 + 50.409 = $155.7 Mil.
Gross Profit was 30.302 + 27.121 + 1.585 + 38.088 = $97.1 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.
Net Income was -1.652 + 0.337 + 1.744 + 1.516 = $1.9 Mil.
Non Operating Income was 6.426 + 16.363 + 26.271 + -1.776 = $47.3 Mil.
Cash Flow from Operations was 113.37 + -125.861 + 31.052 + 46.931 = $65.5 Mil.
Accounts Receivable was $36.0 Mil.
Revenue was 42.335 + 42.616 + 33.911 + 43.025 = $161.9 Mil.
Gross Profit was 30.328 + 29.249 + 20.272 + 28.225 = $108.1 Mil.
Total Current Assets was $362.0 Mil.
Total Assets was $2,723.4 Mil.
Property, Plant and Equipment(Net PPE) was $5.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General & Admin. Expense(SGA) was $11.8 Mil.
Total Current Liabilities was $20.5 Mil.
Long-Term Debt was $1,600.5 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)
=(27.581 / 155.698) / (35.986 / 161.887)
=0.17714422 / 0.22229086
=0.7969

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)
=(27.121 / 161.887) / (30.302 / 155.698)
=0.66758912 / 0.62361752
=1.0705

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 - (242.992 + 5.622) / 2942.705) / (1 - (362.026 + 5.378) / 2723.446)
=0.91551515 / 0.86509591
=1.0583

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
=155.698 / 161.887
=0.9618

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))
=(2.136 / (2.136 + 5.378)) / (1.949 / (1.949 + 5.622))
=0.28426936 / 0.25742967
=1.1043

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)
=(12.713 / 155.698) / (11.849 / 161.887)
=0.08165166 / 0.07319303
=1.1156

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)
=((1848.822 + 25.989) / 2942.705) / ((1600.543 + 20.454) / 2723.446)
=0.63710464 / 0.59520071
=1.0704

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
=(1.945 - 47.284 - 65.492) / 2942.705
=-0.0377

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 -2.85 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Dec13Dec14
DSRI 2.050.65032.21790.73952.17041.46290.42230.68560.9210.8931
GMI 0.79270.82410.86181.42491.08791.14330.50710.89731.0640.9764
AQI 0.84681.37170.88331.45050.83980.76971.56741.02230.9181.0881
SGI 1.86681.59971.68191.23010.68960.82521.88141.02380.89961.101
DEPI 0.39390.2741.08160.88010.66090.72640.78921.08292.39090.9686
SGAI 0.47540.72960.7231.10081.29591.09410.47210.88681.09120.9834
LVGI 1.84280.90691.62341.01750.77140.71931.73840.89230.84931.0315
TATA 0.02140.1257-0.0872-0.08050.1149-0.176-0.0148-0.01870.0344-0.0507
M-score -1.07-1.63-1.43-2.52-1.18-3.01-2.50-2.82-2.29-2.71

Resource America Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.48680.45731.11690.87781.48481.53180.8020.99160.78920.7969
GMI 0.850.82411.081.10971.18391.19970.94661.02841.03171.0705
AQI 1.48831.38370.98181.16770.94990.98670.87571.08811.04421.0583
SGI 1.20291.44570.79310.91550.77890.74881.24880.99160.99350.9618
DEPI 1.71181.64982.21911.771.67881.62420.98510.96861.12281.1043
SGAI 0.72690.58071.09251.14211.5221.74111.03991.09191.00591.1156
LVGI 2.21272.72250.86932.34910.9220.9530.98091.03151.02921.0704
TATA -0.03370.0073-0.01160.03450.0031-0.00670.0023-0.05510.0215-0.0377
M-score -3.08-2.90-2.41-2.76-2.13-2.19-2.51-2.73-2.54-2.85
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