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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 -2.69 suggests that the company is not a manipulator.
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 -2.78.
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 * 0.9567||+||0.528 * 1.0273||+||0.404 * 0.9909||+||0.892 * 1.044||+||0.115 * 0.9803|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0246||+||4.679 * -0.0469||-||0.327 * 0.9923|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $873 Mil.|
Revenue was 2073.7 + 2141.5 + 2165.4 + 2111.7 = $8,492 Mil.
Gross Profit was 752.5 + 857.5 + 847.8 + 701.7 = $3,160 Mil.
Total Current Assets was $1,307 Mil.
Total Assets was $19,843 Mil.
Property, Plant and Equipment(Net PPE) was $7,053 Mil.
Depreciation, Depletion and Amortization(DDA) was $958 Mil.
Selling, General & Admin. Expense(SGA) was $861 Mil.
Total Current Liabilities was $1,697 Mil.
Long-Term Debt was $7,008 Mil.
Net Income was 132.5 + 236.6 + 171.4 + 56.3 = $597 Mil.
Non Operating Income was 1 + 0.8 + 1 + 0 = $3 Mil.
Cash Flow from Operations was 396.4 + 411 + 375.7 + 341.7 = $1,525 Mil.
|Accounts Receivable was $874 Mil.
Revenue was 1998.6 + 2028.4 + 2046.9 + 2060.6 = $8,135 Mil.
Gross Profit was 775.5 + 744.9 + 766.4 + 822.1 = $3,109 Mil.
Total Current Assets was $1,223 Mil.
Total Assets was $19,639 Mil.
Property, Plant and Equipment(Net PPE) was $6,947 Mil.
Depreciation, Depletion and Amortization(DDA) was $922 Mil.
Selling, General & Admin. Expense(SGA) was $805 Mil.
Total Current Liabilities was $1,675 Mil.
Long-Term Debt was $7,008 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(873.2 / 8492.3)||/||(874.3 / 8134.5)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(857.5 / 8134.5)||/||(752.5 / 8492.3)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1306.9 + 7053.4) / 19842.5)||/||(1 - (1223.3 + 6946.8) / 19639.1)|
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.
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))|
|=||(922.3 / (922.3 + 6946.8))||/||(957.8 / (957.8 + 7053.4))|
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)|
|=||(861.1 / 8492.3)||/||(805 / 8134.5)|
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)|
|=||((7007.9 + 1697.4) / 19842.5)||/||((7007.8 + 1675.3) / 19639.1)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(596.8 - 2.8||-||1524.8)||/||19842.5|
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 -2.69 suggests that the company will not be a manipulator.
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
Republic Services Inc Annual Data
Republic Services Inc Quarterly Data