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Resource America Inc (NAS:REXI)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

REXI' s 10-Year Beneish M-Score Range
Min: -3.01   Max: 3.83
Current: -2.71

-3.01
3.83

During the past 13 years, the highest Beneish M-Score of Resource America Inc was 3.83. The lowest was -3.01. And the median was -1.97.


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 * 0.8897+0.528 * 0.9747+0.404 * 1.0881+0.892 * 1.1053+0.115 * 0.9686
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9797+4.679 * -0.0507-0.327 * 1.0315
=-2.71

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $30.9 Mil.
Revenue was 17.104 + 50.409 + 53.115 + 49.302 = $169.9 Mil.
Gross Profit was 1.585 + 38.088 + 41.108 + 35.935 = $116.7 Mil.
Total Current Assets was $261.2 Mil.
Total Assets was $2,900.8 Mil.
Property, Plant and Equipment(Net PPE) was $5.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.9 Mil.
Selling, General & Admin. Expense(SGA) was $11.1 Mil.
Total Current Liabilities was $25.3 Mil.
Long-Term Debt was $1,737.5 Mil.
Net Income was 1.744 + 1.516 + 2.718 + 0.99 = $7.0 Mil.
Non Operating Income was 26.271 + -1.776 + 2.908 + -1.148 = $26.3 Mil.
Cash Flow from Operations was 31.052 + 46.931 + -64.027 + 113.88 = $127.8 Mil.
Accounts Receivable was $31.5 Mil.
Revenue was 33.911 + 43.025 + 33.485 + 43.327 = $153.7 Mil.
Gross Profit was 20.272 + 28.225 + 23.114 + 31.314 = $102.9 Mil.
Total Current Assets was $377.5 Mil.
Total Assets was $2,318.5 Mil.
Property, Plant and Equipment(Net PPE) was $5.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General & Admin. Expense(SGA) was $10.3 Mil.
Total Current Liabilities was $25.2 Mil.
Long-Term Debt was $1,340.6 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)
=(30.939 / 169.93) / (31.464 / 153.748)
=0.18206909 / 0.20464656
=0.8897

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)
=(38.088 / 153.748) / (1.585 / 169.93)
=0.6694396 / 0.68684753
=0.9747

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 - (261.249 + 5.063) / 2900.842) / (1 - (377.467 + 5.844) / 2318.451)
=0.90819493 / 0.83466935
=1.0881

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
=169.93 / 153.748
=1.1053

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))
=(2.14 / (2.14 + 5.844)) / (1.937 / (1.937 + 5.063))
=0.26803607 / 0.27671429
=0.9686

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)
=(11.118 / 169.93) / (10.268 / 153.748)
=0.06542694 / 0.06678461
=0.9797

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)
=((1737.544 + 25.294) / 2900.842) / ((1340.634 + 25.244) / 2318.451)
=0.60769873 / 0.58913387
=1.0315

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
=(6.968 - 26.255 - 127.836) / 2900.842
=-0.0507

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 -2.71 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.68560.71830.48680.45731.11690.87781.42271.38270.7270.8897
GMI 0.89730.8780.850.82411.081.10971.15881.14420.90960.9747
AQI 1.02231.20481.48831.38370.98181.16770.94990.98670.87571.0881
SGI 1.02380.99421.20291.44570.79310.91550.81290.82961.37771.1053
DEPI 1.08291.68361.71181.64982.21911.771.67881.62420.98510.9686
SGAI 0.88680.87390.72690.58071.09251.14211.45831.57160.94260.9797
LVGI 0.89230.77012.21272.72250.86932.34910.9220.9530.98091.0315
TATA -0.0185-0.218-0.03370.0073-0.01160.03450.005-0.0020.0068-0.0507
M-score -2.82-3.57-3.08-2.90-2.41-2.76-2.15-2.23-2.45-2.71
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