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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

RSG' s 10-Year Beneish M-Score Range
Min: -3.04   Max: -0.5
Current: -2.67

-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 -2.75.


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 * 0.9979+0.528 * 1.041+0.404 * 0.9837+0.892 * 1.0414+0.115 * 1.0053
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9108+4.679 * -0.0538-0.327 * 1.0264
=-2.67

* 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 $969 Mil.
Revenue was 2311.4 + 2169.4 + 2225.2 + 2264.1 = $8,970 Mil.
Gross Profit was 891 + 865.1 + 688.7 + 866.8 = $3,312 Mil.
Total Current Assets was $1,341 Mil.
Total Assets was $20,667 Mil.
Property, Plant and Equipment(Net PPE) was $7,539 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,021 Mil.
Selling, General & Admin. Expense(SGA) was $961 Mil.
Total Current Liabilities was $1,788 Mil.
Long-Term Debt was $7,548 Mil.
Net Income was 190.3 + 172.4 + 50.3 + 185.8 = $599 Mil.
Non Operating Income was 0.9 + 0 + 0.5 + -0.1 = $1 Mil.
Cash Flow from Operations was 405.1 + 496.1 + 428.2 + 379.3 = $1,709 Mil.
Accounts Receivable was $933 Mil.
Revenue was 2229.2 + 2077.2 + 2141.5 + 2165.4 = $8,613 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 $1,013 Mil.
Total Current Liabilities was $1,706 Mil.
Long-Term Debt was $7,042 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)
=(969.4 / 8970.1) / (932.8 / 8613.3)
=0.10807014 / 0.10829763
=0.9979

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)
=(865.1 / 8613.3) / (891 / 8970.1)
=0.38430102 / 0.36918206
=1.041

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 - (1340.9 + 7538.7) / 20666.6) / (1 - (1225.1 + 7126.9) / 19876)
=0.57034055 / 0.57979473
=0.9837

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
=8970.1 / 8613.3
=1.0414

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))
=(971.3 / (971.3 + 7126.9)) / (1021.3 / (1021.3 + 7538.7))
=0.11994023 / 0.11931075
=1.0053

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)
=(961 / 8970.1) / (1013.1 / 8613.3)
=0.1071337 / 0.11762042
=0.9108

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)
=((7547.5 + 1788.2) / 20666.6) / ((7042.1 + 1705.5) / 19876)
=0.45172888 / 0.44010867
=1.0264

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
=(598.8 - 1.3 - 1708.7) / 20666.6
=-0.0538

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 -2.67 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98540.97870.98122.73280.41120.96910.98581.02241.02691.0005
GMI 0.99140.99151.01141.07230.84120.99261.01491.05941.0141.0515
AQI 0.97790.98491.00071.40730.99890.99540.99340.99510.98460.9969
SGI 1.05751.07221.03441.16022.22490.98871.01060.99091.03681.0441
DEPI 0.98210.96770.97282.47750.43210.96211.00521.01020.99060.9879
SGAI 1.02031.01480.96281.19440.91030.98570.95191.00371.18840.8715
LVGI 1.16691.0311.01330.9980.93640.95631.02370.99230.98041.0107
TATA -0.1057-0.0497-0.0824-0.0219-0.0394-0.0397-0.0497-0.0425-0.0481-0.0489
M-score -3.01-2.69-2.85-0.51-2.23-2.70-2.71-2.63-2.67-2.63

Republic Services Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.02621.03681.03741.02691.01721.01141.00410.99961.01850.9979
GMI 1.05221.09611.06181.0141.02770.950.96741.05231.00991.041
AQI 0.99110.99190.99270.98460.99090.9980.99090.99690.99040.9837
SGI 0.99081.00011.02331.03681.04441.05231.04911.0451.04621.0414
DEPI 1.04331.06681.05520.99060.98030.970.97780.98791.00511.0053
SGAI 0.96280.99371.00591.18841.21181.15181.15550.87220.88880.9108
LVGI 1.00190.98310.99410.98040.99230.9930.98661.01071.03061.0264
TATA -0.0476-0.0566-0.0563-0.0481-0.0469-0.0398-0.039-0.0489-0.0506-0.0538
M-score -2.65-2.65-2.65-2.67-2.67-2.66-2.66-2.63-2.65-2.67
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