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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.63 (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.

Republic Services Inc has a M-score of -2.63 suggests that the company is not a manipulator.

RSG' s 10-Year Beneish M-Score Range
Min: -3.04   Max: -0.5
Current: -2.63

-3.04
-0.5

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.50. The lowest was -3.04. And the median was -2.76.


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 Republic Services 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 * 1.0049+0.528 * 0.9666+0.404 * 0.9909+0.892 * 1.0482+0.115 * 0.9778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9782+4.679 * -0.039-0.327 * 0.9866
=-2.63

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $955 Mil.
Revenue was 2264.1 + 2225.3 + 2073.7 + 2141.5 = $8,705 Mil.
Gross Profit was 866.8 + 852.3 + 752.5 + 857.5 = $3,329 Mil.
Total Current Assets was $1,361 Mil.
Total Assets was $19,987 Mil.
Property, Plant and Equipment(Net PPE) was $7,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $983 Mil.
Selling, General & Admin. Expense(SGA) was $873 Mil.
Total Current Liabilities was $1,725 Mil.
Long-Term Debt was $7,020 Mil.
Net Income was 185.8 + 179 + 132.5 + 236.6 = $734 Mil.
Non Operating Income was -0.1 + -1 + 1 + 0.8 = $1 Mil.
Cash Flow from Operations was 379.3 + 325.9 + 396.4 + 411 = $1,513 Mil.
Accounts Receivable was $907 Mil.
Revenue was 2165.4 + 2111.7 + 1998.6 + 2028.4 = $8,304 Mil.
Gross Profit was 847.8 + 701.7 + 775.5 + 744.9 = $3,070 Mil.
Total Current Assets was $1,290 Mil.
Total Assets was $19,826 Mil.
Property, Plant and Equipment(Net PPE) was $7,047 Mil.
Depreciation, Depletion and Amortization(DDA) was $944 Mil.
Selling, General & Admin. Expense(SGA) was $852 Mil.
Total Current Liabilities was $1,769 Mil.
Long-Term Debt was $7,024 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)
=(955.2 / 8704.6) / (906.8 / 8304.1)
=0.10973508 / 0.10919907
=1.0049

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)
=(852.3 / 8304.1) / (866.8 / 8704.6)
=0.36968485 / 0.38245296
=0.9666

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 - (1360.9 + 7149.3) / 19987) / (1 - (1290.4 + 7046.9) / 19826)
=0.57421324 / 0.57947645
=0.9909

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
=8704.6 / 8304.1
=1.0482

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))
=(944.3 / (944.3 + 7046.9)) / (982.8 / (982.8 + 7149.3))
=0.11816748 / 0.12085439
=0.9778

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)
=(873.3 / 8704.6) / (851.7 / 8304.1)
=0.10032626 / 0.10256379
=0.9782

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)
=((7020 + 1725) / 19987) / ((7023.6 + 1769.2) / 19826)
=0.4375344 / 0.44349844
=0.9866

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
=(733.9 - 0.7 - 1512.6) / 19987
=-0.039

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.

Republic Services Inc has a M-score of -2.63 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.

Republic Services Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.00370.98540.97870.98122.73280.41120.96910.98581.02241.0269
GMI 0.98760.99140.99151.01141.07230.84120.99261.01491.05941.014
AQI 0.96690.97790.98491.00071.40730.99890.99540.99340.99510.9846
SGI 1.07561.05751.07221.03441.16022.22490.98871.01060.99091.0368
DEPI 0.96340.98210.96770.97282.47750.43210.96211.00521.01020.9906
SGAI 0.95721.02031.01480.96281.19440.91030.98570.95191.00371.0031
LVGI 0.93541.16691.0311.01330.9980.93640.95631.02370.99230.9804
TATA -0.0932-0.1057-0.0497-0.0824-0.0219-0.0394-0.0397-0.0497-0.0425-0.0481
M-score -2.84-3.01-2.69-2.85-0.51-2.23-2.70-2.71-2.63-2.64

Republic Services Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.96310.95631.02241.02621.03681.03741.02691.01771.01231.0049
GMI 1.02211.04111.05941.05221.09611.06181.0141.02730.94920.9666
AQI 1.00240.98820.99510.99110.99190.99270.98460.99090.9980.9909
SGI 1.00620.9910.99090.99081.00011.02331.03681.0441.05131.0482
DEPI 0.96490.96271.01021.04331.06681.05520.99060.98030.970.9778
SGAI 0.99410.99511.00370.96280.99371.00591.00311.02460.97160.9782
LVGI 0.97380.97750.99231.00190.98310.99410.98040.99230.9930.9866
TATA -0.0445-0.04-0.0425-0.0476-0.0566-0.0563-0.0481-0.0469-0.0398-0.039
M-score -2.70-2.69-2.63-2.65-2.65-2.65-2.64-2.64-2.63-2.63
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