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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

RSG' s 10-Year Beneish M-Score Range
Min: -3.04   Max: -0.53
Current: -2.68

-3.04
-0.53

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.53. The lowest was -3.04. And the median was -2.77.


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 * 0.9619+0.528 * 0.9492+0.404 * 0.998+0.892 * 1.0513+0.115 * 1.0063
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9716+4.679 * -0.0398-0.327 * 0.993
=-2.68

* 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 $966 Mil.
Revenue was 2225.3 + 2073.7 + 2141.5 + 2165.4 = $8,606 Mil.
Gross Profit was 852.3 + 752.5 + 857.5 + 847.8 = $3,310 Mil.
Total Current Assets was $1,225 Mil.
Total Assets was $19,876 Mil.
Property, Plant and Equipment(Net PPE) was $7,127 Mil.
Depreciation, Depletion and Amortization(DDA) was $971 Mil.
Selling, General & Admin. Expense(SGA) was $854 Mil.
Total Current Liabilities was $1,706 Mil.
Long-Term Debt was $7,042 Mil.
Net Income was 179 + 132.5 + 236.6 + 171.4 = $720 Mil.
Non Operating Income was -1 + 1 + 0.8 + 1 = $2 Mil.
Cash Flow from Operations was 325.9 + 396.4 + 411 + 375.7 = $1,509 Mil.
Accounts Receivable was $956 Mil.
Revenue was 2111.7 + 1998.6 + 2028.4 + 2046.9 = $8,186 Mil.
Gross Profit was 701.7 + 775.5 + 744.9 + 766.4 = $2,989 Mil.
Total Current Assets was $1,269 Mil.
Total Assets was $19,774 Mil.
Property, Plant and Equipment(Net PPE) was $7,018 Mil.
Depreciation, Depletion and Amortization(DDA) was $963 Mil.
Selling, General & Admin. Expense(SGA) was $836 Mil.
Total Current Liabilities was $1,751 Mil.
Long-Term Debt was $7,013 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)
=(966.3 / 8605.9) / (955.5 / 8185.6)
=0.11228343 / 0.11672938
=0.9619

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)
=(752.5 / 8185.6) / (852.3 / 8605.9)
=0.36509236 / 0.38463147
=0.9492

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 - (1225.1 + 7126.9) / 19876) / (1 - (1268.8 + 7017.7) / 19774.2)
=0.57979473 / 0.58094386
=0.998

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
=8605.9 / 8185.6
=1.0513

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))
=(963.3 / (963.3 + 7017.7)) / (971.3 / (971.3 + 7126.9))
=0.12069916 / 0.11994023
=1.0063

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)
=(853.9 / 8605.9) / (835.9 / 8185.6)
=0.09922263 / 0.10211835
=0.9716

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)
=((7042.1 + 1705.5) / 19876) / ((7013.3 + 1750.8) / 19774.2)
=0.44010867 / 0.44320883
=0.993

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
=(719.5 - 1.8 - 1509) / 19876
=-0.0398

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 -2.68 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 1.00370.98541.05990.9782.66740.41611.03540.99431.00551.0043
GMI 0.98760.99140.99151.00571.07840.84120.99261.01491.05941.014
AQI 0.66510.97790.98491.00071.40730.99890.99540.99340.99510.9846
SGI 1.07561.05751.07221.03441.16022.22490.98871.01060.99091.0368
DEPI 1.69670.98210.96770.97282.47750.43211.04381.00190.93410.9906
SGAI 1.00611.01940.96640.9831.16971.00210.89540.95191.00371.0031
LVGI 0.93541.16691.0311.01330.9980.93640.95631.02370.99230.9804
TATA -0.0962-0.1133-0.0522-0.0824-0.0162-0.0394-0.0397-0.0497-0.0425-0.0481
M-score -2.90-3.05-2.62-2.86-0.53-2.24-2.61-2.70-2.66-2.66

Republic Services Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.87130.98470.99541.00551.09161.01671.00211.00430.95670.9619
GMI 1.01941.02291.04191.06031.05311.09521.06091.01321.02640.9492
AQI 0.99441.00240.98820.99510.99110.99190.99270.98460.99090.998
SGI 1.01191.00620.9910.99090.99081.00011.02331.03681.0441.0513
DEPI 0.99990.99571.01320.93410.93040.91810.87620.99060.99881.0063
SGAI 1.02821.04521.07351.00470.96350.99271.0051.00221.02370.9716
LVGI 0.99960.97380.97750.99231.00190.98310.99410.98040.99230.993
TATA -0.0456-0.0445-0.04-0.0425-0.0476-0.0566-0.0563-0.0481-0.0469-0.0398
M-score -2.80-2.68-2.67-2.66-2.60-2.69-2.70-2.66-2.69-2.68
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