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Resource America Inc (NAS:REXI)
Beneish M-Score
-2.23 (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 -2.23 suggests that the company is not a manipulator.

REXI' s 10-Year Beneish M-Score Range
Min: -4.39   Max: 3.81
Current: -2.23

-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 * 1.3827+0.528 * 1.1442+0.404 * 0.9867+0.892 * 0.8296+0.115 * 1.6242
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5716+4.679 * -0.002-0.327 * 0.953
=-2.23

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $36.0 Mil.
Revenue was 53.115 + 49.302 + 33.911 + 43.025 = $179.4 Mil.
Gross Profit was 41.108 + 35.935 + 20.272 + 28.225 = $125.5 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.
Net Income was 2.718 + 0.99 + 1.375 + 3.442 = $8.5 Mil.
Non Operating Income was 2.908 + -1.148 + 0.595 + 16.897 = $19.3 Mil.
Cash Flow from Operations was -64.027 + 113.88 + -109.614 + 54.529 = $-5.2 Mil.
Accounts Receivable was $31.4 Mil.
Revenue was 33.485 + 43.327 + 15.705 + 123.672 = $216.2 Mil.
Gross Profit was 23.114 + 31.314 + 6.739 + 111.976 = $173.1 Mil.
Total Current Assets was $313.5 Mil.
Total Assets was $2,563.9 Mil.
Property, Plant and Equipment(Net PPE) was $2.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General & Admin. Expense(SGA) was $9.1 Mil.
Total Current Liabilities was $21.8 Mil.
Long-Term Debt was $1,579.4 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)
=(35.986 / 179.353) / (31.372 / 216.189)
=0.20064342 / 0.14511377
=1.3827

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)
=(35.935 / 216.189) / (41.108 / 179.353)
=0.80088719 / 0.69996041
=1.1442

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 - (362.026 + 5.378) / 2723.446) / (1 - (313.469 + 2.496) / 2563.941)
=0.86509591 / 0.87676589
=0.9867

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
=179.353 / 216.189
=0.8296

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))
=(2.141 / (2.141 + 2.496)) / (2.136 / (2.136 + 5.378))
=0.46172094 / 0.28426936
=1.6242

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)
=(11.849 / 179.353) / (9.088 / 216.189)
=0.06606525 / 0.04203729
=1.5716

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)
=((1600.543 + 20.454) / 2723.446) / ((1579.402 + 21.848) / 2563.941)
=0.59520071 / 0.62452685
=0.953

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
=(8.525 - 19.252 - -5.232) / 2723.446
=-0.002

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 -2.23 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

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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.42330.45520.68560.71830.48680.45731.11690.87781.42271.3827
GMI 0.33010.40460.89730.8780.850.82411.081.10971.15881.1442
AQI 0.85540.88751.02231.20481.48831.38370.98181.16770.94990.9867
SGI 2.01831.79561.02380.99421.20291.44570.79310.91550.81290.8296
DEPI 0.7210.80391.08291.68361.71181.64982.21911.771.67881.6242
SGAI 0.42130.48410.88680.87390.72690.58071.09251.14211.45831.5716
LVGI 0.52580.39290.89230.77012.21272.72250.86932.34910.9220.953
TATA -0.1996-0.2698-0.0185-0.218-0.03370.0073-0.01160.03450.005-0.002
M-score -3.23-3.63-2.82-3.57-3.08-2.90-2.41-2.76-2.15-2.23
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