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Tesco Corp (NAS:TESO)
Beneish M-Score
-6.01 (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.

Tesco Corp has a M-score of -6.01 suggests that the company is not a manipulator.

TESO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.79   Max: -0.76
Current: -6.01

-6.79
-0.76

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.76. The lowest was -6.79. And the median was -2.31.


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 Tesco Corp 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 * 1.0866+0.528 * -0.513+0.404 * 0.1531+0.892 * 0.4127+0.115 * 0.878
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.8414+4.679 * -0.4013-0.327 * 0.7314
=-6.01

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was USD 39.3 Mil.
Revenue was 33.586 + 35.453 + 52.22 + 61.397 = USD 182.7 Mil.
Gross Profit was -10.078 + -11.406 + -18.709 + -4.277 = USD -44.5 Mil.
Total Current Assets was USD 244.9 Mil.
Total Assets was USD 379.8 Mil.
Property, Plant and Equipment(Net PPE) was USD 129.9 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 33.6 Mil.
Selling, General & Admin. Expense(SGA) was USD 35.3 Mil.
Total Current Liabilities was USD 28.8 Mil.
Long-Term Debt was USD 0.0 Mil.
Net Income was -18.871 + -56.839 + -78.11 + -19.902 = USD -173.7 Mil.
Non Operating Income was -0.034 + -1.178 + -8.452 + -2.069 = USD -11.7 Mil.
Cash Flow from Operations was -3.398 + 2.116 + -6.481 + -1.818 = USD -9.6 Mil.
Accounts Receivable was USD 87.6 Mil.
Revenue was 74.451 + 91.67 + 134.541 + 141.946 = USD 442.6 Mil.
Gross Profit was -2.29 + 8.375 + 19.698 + 29.499 = USD 55.3 Mil.
Total Current Assets was USD 304.2 Mil.
Total Assets was USD 540.1 Mil.
Property, Plant and Equipment(Net PPE) was USD 189.3 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 41.7 Mil.
Selling, General & Admin. Expense(SGA) was USD 46.5 Mil.
Total Current Liabilities was USD 55.9 Mil.
Long-Term Debt was USD 0.0 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)
=(39.282 / 182.656) / (87.602 / 442.608)
=0.21506 / 0.19792232
=1.0866

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)
=(55.282 / 442.608) / (-44.47 / 182.656)
=0.12490059 / -0.24346312
=-0.513

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 - (244.881 + 129.899) / 379.795) / (1 - (304.214 + 189.307) / 540.094)
=0.01320449 / 0.08623129
=0.1531

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
=182.656 / 442.608
=0.4127

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))
=(41.652 / (41.652 + 189.307)) / (33.577 / (33.577 + 129.899))
=0.1803437 / 0.20539406
=0.878

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)
=(35.335 / 182.656) / (46.498 / 442.608)
=0.19345108 / 0.10505459
=1.8414

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)
=((0 + 28.757) / 379.795) / ((0 + 55.914) / 540.094)
=0.07571716 / 0.10352642
=0.7314

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
=(-173.722 - -11.733 - -9.581) / 379.795
=-0.4013

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.

Tesco Corp has a M-score of -6.01 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.

Tesco Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.75070.91260.96110.82771.27421.19081.03021.1380.88080.9696
GMI 0.75581.17960.89612.45070.54510.92990.93741.021.0546-3.3333
AQI 0.66831.02490.83011.15620.94040.93770.9160.93861.10510.1962
SGI 1.90221.19731.15690.66711.06111.35471.07830.94891.03450.5152
DEPI 0.92431.0591.01340.82161.01241.03690.93651.01340.97660.9725
SGAI 0.67451.01740.96391.33611.01530.770.84081.17051.03981.5278
LVGI 1.07921.03810.82530.54871.04831.46550.75090.98630.8480.6872
TATA 0.07980.0208-0.0544-0.1499-0.10310.01830.0569-0.0871-0.0194-0.2666
M-score -1.77-2.19-2.69-2.74-2.94-2.07-2.08-2.84-2.54-6.79

Tesco Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.11261.05010.9230.88080.76230.79720.89370.96961.08341.0866
GMI 0.9861.01311.02111.05461.20011.74263.5931-3.3333-1.0949-0.513
AQI 0.93971.0051.02131.10511.2171.06061.12930.19620.16960.1531
SGI 0.98361.02921.03621.03450.98860.82680.66430.51520.43550.4127
DEPI 1.00211.03291.05320.97660.95330.92530.92680.97250.84340.878
SGAI 1.11411.03661.08981.03981.00731.11891.32831.52781.68371.8414
LVGI 0.99530.99320.9020.8480.75220.69230.71210.68720.8310.7314
TATA -0.0816-0.0736-0.0676-0.0194-0.0391-0.0803-0.103-0.2666-0.4508-0.4013
M-score -2.82-2.74-2.79-2.54-2.62-2.71-1.91-6.79-6.54-6.01
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