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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.66 (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 -2.66 suggests that the company is not a manipulator.

RSG' s 10-Year Beneish M-Score Range
Min: -3.04   Max: -0.56
Current: -2.66

-3.04
-0.56

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.56. The lowest was -3.04. And the median was -2.70.


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 * 1.0043+0.528 * 1.014+0.404 * 0.9846+0.892 * 1.0368+0.115 * 0.9906
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0031+4.679 * -0.0481-0.327 * 0.9804
=-2.66

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $984 Mil.
Revenue was 2141.5 + 2165.4 + 2111.7 + 1998.6 = $8,417 Mil.
Gross Profit was 857.5 + 847.8 + 701.7 + 775.5 = $3,183 Mil.
Total Current Assets was $1,422 Mil.
Total Assets was $19,949 Mil.
Property, Plant and Equipment(Net PPE) was $7,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $954 Mil.
Selling, General & Admin. Expense(SGA) was $854 Mil.
Total Current Liabilities was $1,717 Mil.
Long-Term Debt was $7,002 Mil.
Net Income was 236.6 + 171.4 + 56.3 + 124.6 = $589 Mil.
Non Operating Income was 0.8 + 1 + 0 + -1.6 = $0 Mil.
Cash Flow from Operations was 411 + 375.7 + 341.7 + 419.8 = $1,548 Mil.
Accounts Receivable was $945 Mil.
Revenue was 2028.4 + 2046.9 + 2060.6 + 1982.4 = $8,118 Mil.
Gross Profit was 744.9 + 766.4 + 822.1 + 779.2 = $3,113 Mil.
Total Current Assets was $1,231 Mil.
Total Assets was $19,617 Mil.
Property, Plant and Equipment(Net PPE) was $6,910 Mil.
Depreciation, Depletion and Amortization(DDA) was $927 Mil.
Selling, General & Admin. Expense(SGA) was $821 Mil.
Total Current Liabilities was $1,695 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)
=(984.2 / 8417.2) / (945.2 / 8118.3)
=0.11692724 / 0.11642832
=1.0043

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)
=(847.8 / 8118.3) / (857.5 / 8417.2)
=0.38340539 / 0.37809485
=1.014

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 - (1421.9 + 7036.8) / 19949.2) / (1 - (1231.3 + 6910.3) / 19616.9)
=0.57598801 / 0.5849701
=0.9846

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
=8417.2 / 8118.3
=1.0368

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))
=(926.9 / (926.9 + 6910.3)) / (954 / (954 + 7036.8))
=0.11826928 / 0.1193873
=0.9906

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)
=(853.8 / 8417.2) / (820.9 / 8118.3)
=0.10143516 / 0.10111723
=1.0031

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)
=((7002.4 + 1717.1) / 19949.2) / ((7051.1 + 1695) / 19616.9)
=0.4370852 / 0.44584516
=0.9804

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
=(588.9 - 0.2 - 1548.2) / 19949.2
=-0.0481

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 -2.66 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 1.00371.07160.97460.9782.66740.41611.03540.99431.00551.0043
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 -2.84-2.93-2.70-2.85-0.57-2.22-2.64-2.70-2.65-2.66

Republic Services Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.96550.99430.87130.98470.99541.00551.09161.01671.00211.0043
GMI 11.01491.01941.02211.04111.05941.05221.09611.06181.014
AQI 0.99590.99340.99441.00240.98820.99510.99110.99190.99270.9846
SGI 1.01281.01061.01191.00620.9910.99090.99081.00011.02331.0368
DEPI 0.94161.00520.98530.96490.96271.01021.04331.06681.05520.9906
SGAI 1.05550.95190.97930.99410.99511.00370.96280.99371.00591.0031
LVGI 1.02411.02370.99960.97380.97750.99231.00190.98310.99410.9804
TATA -0.0514-0.0497-0.0456-0.0445-0.04-0.0425-0.0476-0.0566-0.0563-0.0481
M-score -2.77-2.70-2.79-2.68-2.66-2.65-2.59-2.67-2.68-2.66
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