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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

RSG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -0.5
Current: -2.73

-3.03
-0.5

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.50. The lowest was -3.03. And the median was -2.71.


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 * 0.9996+0.528 * 0.9098+0.404 * 0.9982+0.892 * 1.0354+0.115 * 0.9901
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0333+4.679 * -0.0452-0.327 * 1.0345
=-2.73

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $963 Mil.
Revenue was 2290.2 + 2344 + 2311.4 + 2169.4 = $9,115 Mil.
Gross Profit was 886.5 + 953.8 + 891 + 865.1 = $3,596 Mil.
Total Current Assets was $1,230 Mil.
Total Assets was $20,577 Mil.
Property, Plant and Equipment(Net PPE) was $7,553 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,050 Mil.
Selling, General & Admin. Expense(SGA) was $983 Mil.
Total Current Liabilities was $1,835 Mil.
Long-Term Debt was $7,569 Mil.
Net Income was 172.2 + 215 + 190.3 + 172.4 = $750 Mil.
Non Operating Income was 0.7 + -0.4 + 0.9 + 0 = $1 Mil.
Cash Flow from Operations was 355.2 + 423.3 + 405.1 + 496.1 = $1,680 Mil.
Accounts Receivable was $930 Mil.
Revenue was 2229.1 + 2267.9 + 2229.2 + 2077.2 = $8,803 Mil.
Gross Profit was 688.7 + 866.8 + 852.3 + 752.5 = $3,160 Mil.
Total Current Assets was $1,391 Mil.
Total Assets was $20,094 Mil.
Property, Plant and Equipment(Net PPE) was $7,165 Mil.
Depreciation, Depletion and Amortization(DDA) was $985 Mil.
Selling, General & Admin. Expense(SGA) was $919 Mil.
Total Current Liabilities was $1,826 Mil.
Long-Term Debt was $7,051 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)
=(962.9 / 9115) / (930.4 / 8803.4)
=0.10563906 / 0.10568644
=0.9996

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)
=(953.8 / 8803.4) / (886.5 / 9115)
=0.3589863 / 0.39455842
=0.9098

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 - (1230.3 + 7552.8) / 20577.2) / (1 - (1391 + 7165.3) / 20094)
=0.5731635 / 0.57418632
=0.9982

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
=9115 / 8803.4
=1.0354

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))
=(984.9 / (984.9 + 7165.3)) / (1050 / (1050 + 7552.8))
=0.12084366 / 0.12205328
=0.9901

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)
=(983.1 / 9115) / (918.9 / 8803.4)
=0.10785518 / 0.10438013
=1.0333

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)
=((7568.7 + 1834.8) / 20577.2) / ((7050.8 + 1826) / 20094)
=0.45698637 / 0.44176371
=1.0345

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
=(749.9 - 1.2 - 1679.7) / 20577.2
=-0.0452

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 -2.73 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97870.98122.73280.41120.96910.98581.02241.02690.99880.9995
GMI 0.99151.01141.07230.84120.99261.01491.05941.0141.05330.9098
AQI 0.98491.00071.40730.99890.99540.99340.99510.98460.99690.9982
SGI 1.07221.03441.16022.22490.98871.01060.99091.03681.04591.0354
DEPI 0.96770.97282.47750.43210.96211.00521.01020.99060.98790.9901
SGAI 1.01480.96281.19440.91030.98570.95191.04750.96121.0291.0333
LVGI 1.0311.01330.9980.93640.95631.02370.99230.98041.01071.0345
TATA -0.0532-0.0862-0.0219-0.0394-0.0397-0.0497-0.0425-0.0481-0.0489-0.0452
M-score -2.71-2.86-0.51-2.23-2.70-2.71-2.64-2.63-2.65-2.73

Republic Services Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03741.02691.01721.01141.00360.99871.01760.9970.99650.9996
GMI 1.06181.0141.02770.950.96791.05321.01081.04181.01750.9098
AQI 0.99270.98460.99090.9980.99090.99690.99040.98370.98790.9982
SGI 1.02331.03681.04441.05231.04961.04591.04711.04231.03881.0354
DEPI 1.05520.99060.98030.970.97780.98791.00511.00531.00450.9901
SGAI 1.04820.96120.98060.93260.93951.0291.04731.07451.07011.0333
LVGI 0.99410.98040.99230.9930.98661.01071.03061.02641.03951.0345
TATA -0.0563-0.0481-0.0469-0.0398-0.039-0.0489-0.0506-0.0538-0.0541-0.0452
M-score -2.66-2.63-2.63-2.63-2.62-2.65-2.67-2.70-2.72-2.73
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